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gy will appear severe difference. In other words, if the corporation can correctly recognize the turning point and adopt suitable pricing strategy, this company may win in the market.

3. Standard cost management and cost variance

In the standard cost, cost is estimated not only by indirect cost but also including direct materials and direct labor, which are calculated by the expected figures. It is called the standard cost system. According to production technology, standard cost is divided into ideal standard cost and normal standard cost (Carmona, Macías, 2001).

Standard cost has three purposes. Firstly, it can be used to control the cost. Standard cost can provide the basis for comparison of the financial results. For example, surplus means better than expected, but deficit means the results of operations are not better than those as expected. Therefore, the calculation of the difference to analysis and control cost is important. Secondly, standard cost can be used to make decisions. Usually this method has laid a solid foundation for determining the sales price. Especially, if you want to make sure that product sales price does not belong to the same product, you should put standard cost as a foundation. Thirdly, Standard cost is usually used to make cost calculation is more reasonable. The same product has the same cost. Finally, Standard cost is usually used to reduce the workload of cost accounting (Homburg, 2001).

Firstly, it can facilitate the accounting of cost. As long as defined cost center, identify cost standard, make cost item, you can account out the standard cost and actual cost and cost differences. According to certain procedures, after carrying out the standard cost, the products can be calculated according to the standard cost, the rest of the cost is the roll out cost, so it solves the product cost’s unreasonable problems. Secondly, it makes it easy to distinguish the responsibility of each cost center. Due to the standard cost has already classified the cost center as one, two, three level, and the three level cost has been divided into row workshop, operating region this level. The three level cost center also can reveals the standard cost differences. This destroyed the phenomenon of eating cauldron rice. Each cost item of standard cost is using a separate price standard and quantity standards. Thus each cost item can be determined from the difference of actual responsibility standard so as to distinguish responsibility of each department. Thirdly, it can facilitate the control of cost. After clears the responsibility of a cost center, you can allocate the responsibility of cost control to the operating region, namely level 3 cost center, put cost standard and cost index layers of decomposition to personal, strengthen assessment and make the bonus and cost performance hook. On the other hand, in the standard cost practice, if we take a monthly cost plan measures, it is helpful for calculating monthly cost consumption, then the buyer, according to material member monthly cost control to plan purchase, material control in order to achieve the purpose of raw materials’ cost (Kaplan, 2006).

Finally, it can improve the veracity of decision and effectiveness. Unit contribution ma本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。