agouthaman

 Profile Answers by agouthaman 

• Feb 19th, 2010

 

Cost Management offers two costing methods: standard costing and average costing.

Average costing is used primarily for distribution and other industries where the product cost fluctuates rapidly, or when dictated by regulation and other industry conventions.

 

standard costing is used for performance measurement and cost control.

Under average costing, you cannot share costs. Average costs are maintained separately in each organization. Under standard costing if you use Inventory without Work in Process, you can define your item costs in the organization that controls your costs and share those costs across organizations.