The target (hurdle) rate of return is a capital budgeting function. It is not concerned with standard costs.
Participative management lies in the area of communications and does not relate to standard costs.
MBO can be used in conjunction with a standard costing system, but they are not necessarily related. The primary focus of MBO is goal congruence; it is a behavioral, communication-oriented, responsibility approach system.
A standard cost is an estimate of the cost the company expects to incur in the production process. Without a standard cost, the analysis of actual activities and results is very difficult because there is no standard to measure the performance against. Standard costs are best used with a flexible budgeting system in order to provide the most useful variance analysis. The flexible budget will enable the company to identify differences from the budget that are not simply due to the actual quantity produced or sold being different from the budgeted quantity.
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