Advantages of Standard costing

It provides management with a consistent method of comparing actual performance with planned performance.

It provides a means of ensuring that production resources are purchased and used efficiently.

In establishing standards management can examine and appraise existing practices and procedures to ensure cost-effectiveness and efficiency.

It can inculcate cost-conciousness in the staff.

It helps to motivate staff by setting realistic standards.

Using variance analysis performance ca be monitored and improvements in work methods can result.