Active Sports Life Case Study

The main idea of this research essay is to provide critical evaluation of the limitations as well as benefits of standard costing system of Active Sports Life which is currently engage in manufacturing of female sportswear. The reason behind analysis is the recent reduction in the sales revenue of this organisation. In due course, the Operations Manager has significantly issued a statement which states that the standard costing principles within the specific organisation are at relatively odds with the modern requirements of business like as continuous improvement and replying to the customer requirements. The major reason behind this research examination is to provide appropriate suggestions in reference to standard costing system taking in consideration the specific situational perspectives.
Company Analysis—Active Sports Life
The Active Sports Life is mainly
The major can be remarked as cost-plus contracts and driving of inappropriate activities. It is due to the aspect that there are varied variances under the concept of standard costing system which tends to drive management to make inappropriate decisions to develop favourable variances. In the similar aspect, it can be remarked efficiently that standard costing principles demonstrated that costs does not change in the upcoming future, so that firm can significantly depend upon the standards for varied months or years. However, in a particular environment in which product tends to live shortly or continuous improvement is needed, standarised costing principles reflects to become out of scope within number of months. In the similar context, in manufacturing departments where individuals are more focused on attaining immediate feedbacks of differentiated problems for the purpose of urgent correction. In the particular context, the reporting for the specific variances represents to be highly late to be effectively