How do you think standard costs could be used in a service industry like a hospital, law office, insurance company, etc? As a manager of one of these companies what changes do you think you could make as a result of reviewing variances?
There is no difference between a service sector or any industry with respect to applicability of standard costing.
It can be applied like what other industries does with standard costing. It is a method of evaluation of performance and improving the way we perform in order that the overal performance can be improved.
The changes to be made depends on the type of varience. It would be better if you had mentioned an example of a varience.
How do you think standard costs could be used in a service industry like a hospital,...
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