Relationship between budgetary control and standard costing?

Question: Relationship between budgetary control and standard costing?

Budgetary control and standard costing are closely related as both are important tools used by organizations to control costs and improve financial performance.

Budgetary control involves setting budgets for different functions or departments of an organization and monitoring the actual performance against the budgeted figures to identify any variances and take corrective actions. On the other hand, standard costing involves setting standard costs for different products or services based on predetermined cost factors and comparing the actual costs with the standard costs to identify any variances and take corrective actions.

Thus, standard costing provides a basis for setting budgeted costs, while budgetary control helps in monitoring the actual costs against the budgeted figures to identify any deviations from the standards and take corrective actions. Together, budgetary control and standard costing help organizations in controlling costs, improving efficiency, and achieving their financial objectives.

Rjwala

Rjwala is your freely Ai Social Learning Platform. here our team solve your academic problems daily.