Monitor and Control Actual Costs on the Standard Costing Method

Controlling actual incurred costs when using the standard costing method involves several measures:

1. Monitoring and Comparing: Track actual costs and compare them with predetermined standard costs. Analyze discrepancies to determine their causes and implement necessary corrective actions.
2. Identifying Causes: Analyze the reasons for the difference between actual and standard costs. This may include changes in raw material prices, fluctuations in labor productivity, or other factors affecting production or service performance.
3. Adjusting Standards: Based on the analysis from the previous step, consider adjusting standards to more accurately reflect reality and achieve cost control objectives.
4. Managing Variability: Implement management measures to minimize unwanted fluctuations in costs, such as improving production processes, enhancing control over materials and labor, or promoting efficiency in resource utilization.
5. Continuous Improvement: The process of cost control using the standard costing method needs to be continuously improved based on analysis results and adjustments in production and business processes.
6. Communication and Training: Ensure that employees have the necessary knowledge and skills to implement cost management using the standard costing method. Training and knowledge dissemination are important to ensure that everyone understands and participates in this process.

By implementing these measures, you can control actual incurred costs when using the standard costing method and achieve optimal business performance.