Q1) Standard costing has been described as being ‘obsolete’ being outdated and incompatible with modern manufacturing techniques. Discuss the relevance of standard costing in light of the criticisms...

1. As per a survey conducted by Schiff (1993) regarding the method used by the manufacturers in America, he found that more than 80% of the total manufacturers in America still use Standard Costing Method along with the ABC method. ABC method is used for indirect costing and the standard costing is used for direct costing. A similar study by Wijewardena & De Zoysa (1999), this survey was conducted in Australia and Japan, the author found that around 76% manufacturers use Standard Costing method only. A similar study by Badem, Ergin & Drury (2013) on the automobile Industry in Turkey found that about 74% manufacturers use the Standard costing system.
From the above studies we can see that the standard costing system is still very relevant in the manufacturing industry all over the world. The standard costing method gives more control to the user since it helps setting standards which can be compared with the actual results to find variances, so that the future performance can be improved. Standard...