Many of the current texts on Cost and Management Accounting treat Standard Cost as a failed methodology that they want to avoid talking about. Some texts skip over it completely, favoring instead ABC and ABM methodologies. But the fact of the matter is that most manufacturing (and many businesses in other industries) are using standard cost. If a person is unfamiliar with it, how could they hope to get a job in the first place?
I have not been able to locate a really good updated source on the subject since ‘Updating Standard Cost Systems‘ by Carole Cheatham and Leo R. Cheatham came out in 1993. Most authoritative sources came out in the early 1900’s. In an update article in a CIMA Thought Leadership Newsletter from 2010, we discover the same problem mentioned earlier, they consider it a failed methodology and do not tell readers how to effectively use it, but instead point out its shortcomings.
Whenever Standard Cost comes up as a discussion in our LinkedIn group it receives a lot of comments, mostly regarding the inability of newer Cost Accountants to understand the GL account implications of standard cost transactions.
Once again, we are calling for practitioners and those in academia to help share their knowledge with others and send us article contributions. Or, if you have seen good content on standard cost recently, please send us the link to check out. Thanks in advance.