Evolving Costing Practices

The Evolution and Entrenchment of Standard Costing
Historical Development
Standard costing emerged in the 1920s when Ford Motor Company pioneered its use for mass production environments. The system was revolutionary for its time, allowing manufacturers to establish predetermined costs for materials, labor, and overhead that could be used to value inventory and measure operational performance. The methodology spread rapidly across industries as manufacturers sought ways to control costs and improve efficiency in increasingly complex production environments.

Current State
Today, standard costing remains the default costing system for most manufacturers, deeply integrated into their Enterprise Resource Planning (ERP) systems and financial processes. However, the modern manufacturing environment bears little resemblance to the stable, predictable conditions that existed when standard costing was developed. Rapid technological change, global supply chains, and increasing market volatility have created new challenges that standard costing struggles to address effectively.

https://accountingprofessor.org/the-hidden-challenges-of-standard-costing-in-manufacturing-organizations/

Видео Evolving Costing Practices канала Accounting Professor.org- Ben Wann