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In setting standard cost for materials, which element must be determined first and why?

In setting standard cost for materials, which element must be determined first and why? _

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Question added by Anayatullah Tahir , Finance Manager , Etqan Projects
Date Posted: 2014/03/17
Mokbel Abuayash CMA
by Mokbel Abuayash CMA , Holding Finance Manager , Al Hattab Holding Group

Quality must be determined first, because it affects all the other variables (Quantity and Price).

Seemaa Verma
by Seemaa Verma , Consultant , Independent Consultant - Business

The elements that should be taken into consideration while arriving at standard rate for a product are the quality, availability, probability of rate fluctuations along with the rmaximum range of the fluctuation and the order quantity. Out of these, quality definitely plays the major role. Considering the rate of the highest quality and then plotting all other elements linked to this quality will be the most effective standard rate.

Raluca Maria Schiopescu
by Raluca Maria Schiopescu , Inspector Accountant , City Hall Sannicolau Mare

the most important is quality.

Abdul kadir Shaikh
by Abdul kadir Shaikh , Accounting Manager , KRONO IINC

I Think the main focus should be on Quality, because its effects more on cost and other variables, and for future durable into the market

Md Kawsar Amin
by Md Kawsar Amin , Electrician , Motlab Electric

Carrying/transportation Cost. Because this element affects the cost of materials from the beginning. this cost affects CM most than the element.  

meseret beyene
by meseret beyene , Cabin Agent , Qatar Airways

The raw materials. This is because the cost will affect all the other eliments like the cost put towards the human resource, the transportation the factory or warehouse the taxes and miscllanious elements.

Rajesh Gupta Gupta
by Rajesh Gupta Gupta , Sr. Mgr- SCM , Stallion Auto Parts Pvt. Ltd

Cost of the Material , as Quality is taken as granted & if cost is within target then Delivery can be improved & managed,

Imad Khalid
by Imad Khalid , Financial Analyst , Freelancer

The cost of raw material, as it is, in general, the most substantial from the cost point of view, as it usually comprises no less than60% of the cost of production.

Udaykumar Mani
by Udaykumar Mani , Executive Chef , Braira Hotels & Resorts

Market trend, price comparison, competitors price, service, benefits and freebees  from the organisations in same busines and in the vicinity.

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