Budgetary control

Standard Costs for Budgetary Control For convenience and simplicity, we shall consider the total cost of a manufac tured product to be the sum of the material, labor, and overhead costs. Standard costs are those that have been predetermined and budgeted for the manufacture of a given amount of product in a given time. The deviation of the actual cost from the standard cost is called the variance. It is far easier to make comparisons between periods by using variances than by using actual production data. The different variances for materi, labor, and overhead costs are listed in Table 9-38. 

The R D Manager must ensure that the cost for the analytical support is in the budget for each project. Monitoring the cost and the use of analytical services is an essential task in budgetary control as it is easy for an R D team to run into overspend rapidly. It helps if data is provided to team leaders and chemists on the cost of the methods available in the analytical services group or from the outsourcing agency. 

Standard costing is extensively used in budgetary-control systems. Criteria for the establishment of standards range from the maximum possible under ideal conditions to those expected under normal conditions. Past or historical costs are not always the best basis for setting up standards because past performance may have been unnecessarily inefficient. 

One method that may prove useful involves the use of budgetary control which would introduce economic accountability into the field of accident prevention. Such measures would involve the re-organisation of the existing accounting procedures in most companies in order to overcome the lack of accountability for accident prevention and risk management. 

It is vital that the company has a rehable accounting system in place to provide fast and accurate cost information. The minimum requirements should be standard costing and budgetary control. 

Instructs on cost limits for implementation of corrosion-control measures. In the latter stages provides budgetary control to prevent corrosion control from running wild and to prevent uimec-essary and excessive precautions. 

Snpply required data to budgetary control for costing and evaluation of corrosion prevention. 

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