Xi Company currently uses a traditional standard costing system.During the past two years the company has been modernizing its plant and has tried to keep the old standard costing system in place by changing some of the features to reflect the more automated situation.It has now come to a point,however,where the old system just isn't providing useful information for product costing,pricing,decision making,etc.The CEO,Ms.Chang,has set up a team to look into the situation and come up with reasons why the old system isn't working anymore.Required:
What are the problems with traditional standard costing under the current manufacturing environment?

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The Answer of Xi Company currently uses a traditional standard costing system.During the past two years the company has been modernizing its plant and has tried to keep the old standard costing system in place by changing some of the features to reflect the more automated situation.It has now come to a point,however,where the old system just isn't providing useful information for product costing,pricing,decision making,etc.The CEO,Ms.Chang,has set up a team to look into the situation and come up with reasons why the old system isn't working anymore.Required:
What are the problems with traditional standard costing under the current manufacturing environment?

Xi Company Currently Uses a Traditional Standard Costing System