Difference Between Budgetary Control And Standard Costing

Difference Between Standard Costing And Budgetary Control

The main dissimilarities or difference between budgetary control and standard costing can be expressed as follows:

1. Meaning

Budgetary Control: Managerial process of creating budget and comparing with actual output.

Standard Costing: Comparison between predetermined costs and actual costs of the products.

2. Relation With

Budgetary Control: Financial Accounts

Standard Costing: Cost Accounts

3. Scope

Budgetary Control: Very wider scope (covers various area such production, sales, research and development and other financial aspects of the business).

Standard Costing: Limited scope ( related to product cost only)

4. Dependency

Budgetary Control: Can exist without standard costing

Standard costing: Based on budgetary control

5. Applicable

Budgetary Control: It is applicable for all types of organizations (both manufacturing and non-manufacturing organizations)

Standard Costing: Applicable for manufacturing firms only

6. Standardization

Budgetary Control: No need of standardization

Standard Costing: Needs product standardization

7. Based Upon

Budgetary Control: Based upon past experience and records

Standard Costing: Based upon systematically developed norms and standard

8. Forecasting

Budgetary Control: It aids in forecasting

Standard Costing: It does not help in forecasting

9. Variance Calculation

Budgetary Control: No variance calculation needed

Standard Costing : Variance calculation needed

   Also Read: 

Difference Between Static And Flexible Budget

10. Expressed In Terms Of

Budgetary Control: Total amount

Standard Costing: Unit cost

11. Rigidness

Budgetary Control: It is less rigid because less analysis is required than standard costing

Standard Costing: It is more rigid because it requires more analysis than budgetary control.

Budgetary Control Vs Standard Costing (Comparison Chart)

Basis For Difference	Budgetary Control	Standard Costing
Introduction	Process that involves creation of  budget and comparing with actual result	Identifying the variance between estimated costs and actual costs by comparing them.
Related To	Financial accounting	Cost accounting
Scope	Broader	Narrower
Dependency	Not dependent on standard costing	Dependent on budgetary control
Applicable For	All types of business	Manufacturing firms
Standardization	Not needed	Needed
Based On	Past data and records	Specific standards and norms
Aids In Forecasting ?	Yes	No
Variance Calculation	No	Yes
Expressed In	Total amount	Unit cost
Rigidness	Less	More

I hope this post is helpful to understand the difference between standard costing and budgetary control and to make comparison between them.