Describe any five benefits of the Digital Costing System.

Benefits of Digital Costing System are as follows: (i) Ascertainment of cost with certainty on a cost object. This helps to analyse the activities for cost allocation and apportionment. (ii) Analysis of data on time spent on each activity to study and formulate incentive plans. (iii) Helps in material requirement planning and scheduling the material procurement. Data on resource consumption can be analysed for resource optimisation and finding the possibilities for zero wastage and Just-in Time (JIT). (iv) Helps to identify and eliminate the non-value-added activities. (v) Data on resource consumption is helpful in setting the standards and measurement of variances on real time basis. (vi) Data on current market prices of material and consumables helps to estimate cost and setting standards on Marked to Market (M2M) basis. (vii) Extrapolation of data on customer behaviour towards the products to predict the market demand. It is helpful is preparation of budgets and planning of production. (viii) A better analysis of cost behaviour improves the cost benefit analysis and equipping the management in informed decision making.