Accounting case Essay Example | Topics and Well Written Essays - 250 words

Accounting case - Essay Example les and production department, the department could not complete the order based on standard costing since there were significant labor cost variations which would then be assigned in the department’s budget. Labor also worked over time which added to the costs of the department, leading to a production batch that was more expensive than other regular batches (Caplan, 2012). One of the key ways that most organizations use to manage their costing systems is to use a standard costing mechanism and use flexible budgeting in order to cater to such variations which are inevitable in such organizations where some orders may come in for rush production. With flexible budgeting, the variations between actual and budgeted costs are utilized to evaluate futuristic trends and seasonable patterns. In this manner, the organization can use not only the same standard costing mechanisms but also flexible patterns in order to help predict how costs may vary in case of such non standard practices like overtime production, or production in shorter timelines (Caplan, 2012). Caplan, D. (2012). Management Accounting: Concepts and Techniques. Retrieved June 27, 2012, from Oregon State University: