Differences between Standard Costing & Budgetary Control
Both standard costing and budgetary control have common objective of controlling costs or expenses. Hence, these systems are considered to be interrelated to each other. But they are not inter-dependent. In this aspect, the differences between standard costing and budgetary control are presented below.
| Standard Costing | Budgetary Control |
|---|---|
| 1. It is concerned with control of costs or expenses. | 1. It is concerned with the operation of business without interruption. |
| 2. It is the projection of cost accounts. | 2. It is a projection of financial accounts. |
| 3. It requires standardization of products. | 3. It does not necessarily involve standardization of products. |
| 4. It should be applied in whole organisation and cannot be applied for only one section or division. | 4. It can be adopted only for a section also. |
| 5. Budgeting is necessary for adopting standard costing. | 5. Standard costing is not necessary for adopting budgetary control. |
| 6. It indicates the minimum target to be achieved. | 6. It fixes the ceiling of costs or expenses. |
| 7. It is based on technical information. | 7. It is based on past records and future expectations. |
| 8. Standards are set for the expenses only. | 8. Budgets are prepared for income also. |
| 9. It cannot be used for forecasting purpose. | 9. It can be used for forecasting also. |
| 10. It deals with the variances of elements of cost i.e. material, labour, overhead and sales separately. | 10. It deals with total variances only. |
The above are some of the differences between Standard Costing & Budgetary Control.
