Management Cost

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Cost Management

...Cost Management Laura M. Davis BUS630: Managerial Accounting (NAH1226A) Professor John Kuhn August 7, 2012 Cost Management There are many aspects of accounting that are important to the functions of a company. I believe that one of the most important is cost management. Cost management is when you manage the cost within a company by tracking all cost that is involved in all of the day to day processes. This allows for the company to keep the cost of the company lower by managing those cost within the company to keep them as low as possible and to be able to explain and understand why a cost may rise or how to decrease a cost. Cost management is an aspect of managerial accounting. “Managerial accounting is concerned with providing information to managers-that is, the people inside an organization who direct and control its operations. In contrast, financial accounting is concerned with providing information to stockholders, creditors, and others who are outside the organization.” (Noreen, Brewer, Garrison (2011)). From the inception of a business idea cost management is implemented. When considering opening a business the very first activity that is performed is a cost analysis of what the cost will be to open a business. From there a revenue projection is completed in detail of a certain time period to determine if there will be profit after the cost of the business. By using managerial accounting the Controllers and Cost Accountants within a company......

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Cost Management

...rojects cost. Have you ever worked with a client who had a huge vision for a project, but had little capital to invest into the vision? Or have you worked with a client who gasped when you revealed how much it would cost to complete their desired scope of work? Or have you been fortunate and had a customer who accepted the costs for the project at face value, made certain the funds were available, and sent you on your way to complete the work? As a general rule, management and customers are always concerned with how much a project is going to cost in relation to how much a project is going to earn. Most likely there is more negotiating, questioning, and evaluating for larger projects than for smaller ones. The relation between the project cost and the project scope should be direct: you get what you pay for. Think it’s possible to buy a mansion at ranch home prices? Not likely. Think it’s possible to run a worldwide marketing campaign at the cost of a postcard mailer? Not likely. A realistic expectation of what a project will cost will give great weight to the project’s scope. As the business need undergoes analysis, progressive elaboration and estimates are completed based on varying levels of detail, and eventually the cost of project will emerge. Often, however, the predicted costs and the actual costs vary. Poor planning, skewed assumptions, and overly optimistic estimates all contribute to this. A successful project manager must be able to plan, predict,...

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Cost Management

...for face­to­face, personalized service that resolved most of their requests at their desks. C3i’s new model of servicing most issues and requests from an off­site call center was initially met with resistance, but soon proved to be very effective for end users. As an added benefit, the client’s IT group adopted C3’s ticketing system as its service management tool to track not only all end user requests, but internal IT infrastructure and application development service requests, as well. C3i’s solution for client started out by expanding the existing dedicated Tier 1 field sales help desk team with additional technician and management staff: Senior Client Manager focused on corporate office support operations, paired with a separate Client Manager focused on support operations for the field­based users Technical Account Supervisor (TAS) focused on corporate office support operations, paired with a TAS focused on field support operations Call Center manager overseeing all call center operations and technicians QA & Training resource to train and monitor the C3i support team C3i, Inc www.c3i­inc.com C3i’s Enterprise Services management team spent 3 months executing a comprehensive knowledge transfer process working with the client’s resources to develop detailed support documentation. This included creating many new Knowledge Objects (KOs) that are used by the technicians to troubleshoot issues. KOs were also used to develop a detailed training program for the support......

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Strategic Management and Cost Management Concepts

...John Molson School of Business Strategic Management and Cost Management Concepts April 8, 2010 Section G Table of Contents Introduction 2 1. Overview of Cost Management and Strategy 3 2. Implementing Strategy 5 3. Basic Concepts 10 Conclusion 14 References 15 Appendix I: Product & Period Costs 18 Appendix 2: Balanced Scorecard 19 Companies are constantly trying to improve their business and the quality of their products. While Marketing and Operations Management are two departments that aid in improving a company’s business, the accounting department plays a major role in this transformation as well. Considering the managerial aspect of accounting, a lot of what it takes to improving ones business is cost management and strategy. Strategic and cost management are essential to any business as they provide the foundation for determining problems and improving quality. Strategic and cost management concepts can be broken down into three parts: the overview of strategies that can be used, the ways to implement these strategies and the cost concepts that can be used to manage costs. 1. Overview of Cost Management and Strategy There are several cost and strategic techniques that can be used to improve a company’s overall position. These techniques, however, are within broader topics, such as the business environment, management techniques and competitive strategy. Firstly, a changing......

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Cost Management

...CHAPTER 5: ACTIVITY-BASED COSTING AND MANAGEMENT QUESTIONS 5-1 Product costs are likely distorted when a firm uses a volume-based rate if the plant has more than one activity in its operations and not all activities consume overhead in the same proportion. The more diverse the product mixes of the plant are in volume, sizes, manufacturing processes, or product complexities, the greater the cost distortions are likely to be in using a volume-based rate. Undercosting a product may appear to have increased the reported profit the product earned (assuming the firm did not lower its selling price because of the reported lower product cost). However, the increased profit is, at best, a twist in truth. Costs of the product not charged to the product itself are borne by other products of the firm. Worse, undercosting a product may result in managers erroneously believing the product to be more profitable than other products and shifting the limited resource the firm has into manufacturing, promotion, and sales of the product when, in fact, other products are more profitable to the firm. Severe cost distortions may lead firms not to drop unprofitable products because the cost data show these products are profitable. 5-3 Overcosting does not increase revenues. A firm can increase the selling price of a product, thereby increasing the total revenue from the product only if the market allows. Increases in the selling price of a product without experiencing noticeable decrease in the......

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Cost Management

...level of activity. According to McKinsey1, this „new normal‟ is characterized by:  Significantly less financial leverage in the system,  An expanded role for government,  New levels of transparency and disclosure for investment vehicles,  Less U.S. consumption (meaning a reduced role as the engine for global growth). The good news is that organizations are starting to adapt rather than reduce or eliminate programs. In the roundtable discussions, participants spoke of developing new ways to justify programs, reevaluating business models, and focusing only on business prospects with well-qualified potential. This includes molding travel programs to fit into budgetary constraints, which often included a reduction in qualifiers, fewer management attendees, fewer room gifts and less than five-star properties. ww.theIRF.org Page 3 DRIVING OUR FUTURE: THE TOP 11 INCENTIVE TRENDS FOR 2011 3. GOING, GOING, GONE…GLOBAL Our industry can no longer think globally only in terms of the places we send people and the products we carry. We must now think globally in terms of complete business opportunities. In Globalinc: An Atlas of The Multinational Corporation2, Medard Gabel and Henry Bruner suggest that the number of multinationals has grown to 820,000 if affiliates are included. By 2015, more than 50 percent of Brazilians, Indians and Chinese will be considered “middle income,” consumers. In January 2011, Google searches on “employee engagement” were ten times higher in......

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...The author, William, explored the role of CMA (Certified Management Accountant) certification and IMA (Institute of Management Accounting) play in accountants’ and financial professionals’ career story through this article” growing your career”. The CMA is the globally recognized, and advanced-level credential appropriate for accountants and financial professionals in business. It is the key to greater career potential. As the author mentioned, there are several characteristics in the CMA credential. That is prestigious, professional, rigorous, empowering and competent. The CMA covers the in-demand skills for accountants and financial professionals in business needed on the job today as a professional and as a leader. Pursuing the CMA certification makes difference for whom want to obtain the combination skills of accounting and finance. For the compensation, the “gold standard” of management accounting credential also makes a difference. Professionals who hold the CMA credential on average earn $34,000 more in annual total compensation than their noncertified peers.* Whether candidates want to enhance the value that brings to the current position, or expand their career potential, the CMA will help them set the standard for professional excellence. IMA, the worldwide association of accountants and financial professionals working in business, empowers accountants and financial professional to drive business performance. IMA is committed to help the members which are more than...

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Cost Management

...CHAPTER 1: MANAGEMENT ACCOUNTING Introduction: Accounting may be broadly classified into two categories – accounting which is meant to serve all parties external to the operating responsibility of the firms and the accounting which is designed to serve internal parties who take care of the operational needs of the firm. The first category which is conventionally referred to as financial accounting, looks to the interest of those who have primarily a financial stake in the organization’s affairs – creditors, investors, employees etc. On the other hand the second category of accounting is primarily concerned with providing information relating to the conduct of the various aspects of a business like cost or profit associated with some portions of business operations to the internal parties viz., management. This category of accounting is called as Management accounting. In order to perform the primary task of decision making managers of business enterprises need information about the past, present and future in the functional areas of management such as personnel, finance, marketing and production. Right decision making has to be based on quantitative and qualitative information. The management thus constantly needs accounting information to base its decisions upon. Thus management accounting provides the information needed by management personnel. Definition: The Institute of Chartered Accountants of England has defined management accounting as: “Any form of......

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Cost Management

...traditional cost management VS lean cost management by Mahanim Hanid, Lauri Koskela and Mohan Sinwardena, the term of cost management is not a well defined term. It’s built on both cost accounting and management accounting, but goes beyond these two terms (P. Agrawal and Mehra 1998). For Brinker (1996) defines it as a set of techniques and methods for controlling and improving a company’s activities and processes, its products and services. In addition, Maskel (2009) also described that the cost and management accounting is used internally to help the company’s manager control and improve the business. Although there is an accounting standards associated with these tasks, there is no legal requirement to perform these tasks in any particular way or to perform them at all. A company can do as much or as little cost and management accounting as it wishes and it can be done in any way it wants. Furthermore, cost accounting practices are seldom exactly similar in different companies (P. Agrawaland and Mehra 1998). According to text referred, cost management is equally important to all companies, regardless of size. Small companies generally have tighter monetary controls, mainly because of the risk with the failure of as little as one project, but with less sophisticated control techniques. Large companies may have the luxury to spread project losses over several project whereas the small company may have few projects. Cost management is not only “monitoring” of costs and......

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Cost Management

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Cost Management

...SCHOOL OF BUSINESS, ECONOMICS AND MANAGEMENT AFIN317 : ADVANCED MANAGEMENT ACCOUNTING DISTANCE STUDENTS ASSIGNMENT TWO DUE DATE 17TH APRIL 2015 LECTURER : MR OSCAR CHINYANTA EMAIL :chinyantao1976@gmail.com CELL NUMBER :0964405740 Instructions to Candidates: 1. All questions to be answered. 2. Full credit will be given only if all the working is shown. 3. Begin answering each question on a new page 4. Clarity and neatness of presentation will earn you an extra marks 5. Only hard copies will be accepted for marking no emailed copies will be marked. Page 1 of 8 QUESTION ONE a) Monk Plc is a manufacturer of small domestic electrical appliances. Its market is very competitive in terms of both price and new product innovation. As a result product life cycles are short. Monk Plc’s managers are concerned about the reliability of its product costing system. It currently uses an absorption costing system, and absorbs overheads on the basis of budgeted direct labour hours. On this basis the estimated cost of its latest product, a talking electric kettle, is as follows: K per unit Direct material 9·00 Direct labour (K24 per hour) 1·00 Production overheads (K240 per hour) 10·00 ––––– Production cost 20·00 –––––– The firm’s management accountant has suggested that more accurate product costs would be obtained if an activity based costing (ABC) approach were used. He has collected the following information as a starting......

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Cost Management

...International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 4, April 2013 i-Xplore International Research Journal Consortium www.irjcjournals.org 1 The Impact of Cost Control on Manufacturing Industries’ Profitability Siyanbola, Trimisiu Tunji, Lecturer in Accounting, Babcock University, Ilishan Remo, Ogun State, Nigeria. Raji, Gbolagade Mojeed, Lecturer in Accountancy at The Polytechnic, Ibadan. ABSTRACT Cost control is of utmost importance in every business concern, the negligience of which will affect the earnings at any point in time. In controlling costs, wastage is eliminated during the course of production and even during the administrative, selling and distribution activities. A good system of cost control begins with the behaviour of workers in the organisation as workers are instrumental to the achievement of organisational goals. In carrying out this research, budget was considered as the basic tool for achieving effective cost control and the study was concentrated on West African Portland Cement Plc (WAPCO), where cost control was viewed from a strategic perspective. Pearson correlation model was used in analysing the data and the hypotheses tested confirmed positive impact of cost control on the industries’ profitability. Keywords Cost, control, profitability, management, budget, production, sales. 1.1 INTRODUCTION Cost and profit in business undertakings form part of what determines the financial position of a......

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Yokohama Cost Management System

...Harvard Business School 9-195-108 rP os t October 14, 1994 Yokohama Corporation, Ltd. (B): Cost Management System op yo Yokohama Corporation, Ltd., was created as a joint venture between a Japanese automobile manufacturer and the Japanese government. Yokohama was founded in July 1939 and began production in late 1942. The objective of the firm was to manufacture hydraulic systems for automobiles and trucks and associated equipment under license from a German firm. The venture was successful and within a few years had diversified into other automotive products, including fuel pumps and transmission systems. tC Manufacturing inside Japan was undertaken at five facilities: Ranzan, Ibaraki, Chiba, Hiroshima, and Maebashi. The original production facility, the Ranzan plant, was opened in 1940 to produce hydraulic products. In 1992, it manufactured four major product lines, including electronic fuel-injection control systems, in-line injection pumps, automatic timing devices, and fuel-injection nozzles. It produced products for the injection pump and hydraulic & pneumatics divisions. The Ibaraki plant was built in 1965 to manufacture injection nozzle holders for the injection pump division. The Chiba plant was built in 1970 to manufacture air-conditioning equipment for the air-conditioning division. The Hiroshima plant was built in 1982 and manufactured injection nozzles for the injection pump division. Finally, the Maebashi plant was built in 1990 and was responsible for......

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Cost Management

...managers to make short and long-term decisions is cost function. In other words, this concepts helps managers to predict future costs using historical accounting and non-accounting data, assumptions and qualitative factors. This concept helps to estimate costs of goods production, facilitation or other business activities. First, cost is identified as fixed or variable. Fixed costs are not changed when the quantities number of goods or services change, so it will occur whether production occurs and include overhead, administrative salaries, insurance . On the other hand, variable costs depends on the number of units and can include direct materials, labour, sales commissions. This concept is useful for the businesses in case they have enough data to make predictions. Additionally, the cost function is reliable only for relevant range and will change below or above this range. Generally, total cost include fixed costs and variable costs per unit multiplied by units. For example, we are considering opportunity to celebrate New Year together with classmates and friends in Toronto or Greater Toronto Area. In that case we need to rent a house, to buy food and drinks, to buy fireworks. However, the number of people can be between 10 and 20 people depending on the results of our discussion and other factors such as MBA Games, which started on the 2nd of January. The cost of the house for up to 14 people is $1400 for two nights, when the cost for the house for 20 people is $2000......

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Cost Management

...B7AF104 COST MANAGEMENT Assessment Cost Management Assignment (Shopping Limited) Prepared by: Name ID Number DBS150718739 Nur Iza Carmilla Bt Mohd Diah Section 2.4 10333550 NurKarimah Bt Abd Halim DBS150718748 2.4 10333562 Fitriah Bt Sulaiman DBS150719759 10333514 Prepared for: Mr Syed Azlan Aljaffree Bin Syed Khadzil No of words: 1675 words 1 2.4 CONTENTS PAGE 1.0 EXECUTIVE SUMMARY 3 2.0 QUESTION 1 4 3.0 QUESTION 2 5 4.0 QUESTION 3 4.1 QUESTION 3 (a) 7 4.2 QUESTION 3 (b) 8 5.0 QUESTION 4 9 6.0 CONCLUSION 10 7.0 REFERENCE 11 8.0 INDIVIDUAL CONTRIBUTIONS 12 2 Executive Summary Shopping Limited is family-owned and managed, traditional department store situated in a city in the North of England. The store has four retailing departments which is Furnishing, Kitchenware, Menswear, Toy and Restaurant. Each department is managed by a departmental manager and recently Samantha was appointed to the post of departmental manager of the Toy Department, Albert is the departmental manager of Menswear, Joseph is the departmental manager of Kitchenware, Arthur is the departmental manager of Furnishings and Claude is the departmental manager of Restaurant. Albert may be Samantha’s great uncle, who used to be a Sergeant in the Police Force but they often argue because they seldom agree with each other’s opinions. On the other hand, Claude have an......

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