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One decision which is often considered as one of the most important decision to make while implementing an ERP
system is selecting an appropriate Costing method for your organization. Two most commonly used costing methods are
Average and Standard Costing.
The Article presents a quick analysis of important considerations while selecting the costing method for your
manufacturing organization and presents a brief comparison of two Costing Methods. Based on my experience, I have
tried to cover the areas which I think are most important for selecting the right Costing Method.
Costing Method
Description
Standard Costing
Average Costing
Relevant Business
Scenarios
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Cost Administration
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Benefits
Challenges
PS: I have not covered any system related information or setups in this article (I shall be writing another article to present
a solution to reap benefits of both costing methods in one organization based on Oracle Applications ERP platform).
Hope you will find this analysis interesting; your suggestions and feedback are most welcome!
Regards,
Manu Singhal
www.Oraclemfgblog.wordpress.com