georgiap
Apr 18, 2009, 03:48 PM
I am currently on the topic of Cost Management Systems (CMS). Below are the three purpose of CMS and three decisions. My problem is finding out which purpose goes with which decisions and in what way it will help the decisions.
Purposes:
1. cost information for strategic management decisions,
2. cost information for operational control, and
3. measures of inventory value and cost of goods sold for financial reporting to investors, creditors, and other external stakeholders.
a. For example, a marketing manager wants to know the cost of performing a setup for a marketing run in order to compare it to a target cost established as part of a process improvement plan.
b. An executive wants to identify the profitability of several product lines to establish the optimum product mix.
c. A financial manager wants to know the manufactured cost of inventory to appear on the balance sheet of the annual report.
Purposes:
1. cost information for strategic management decisions,
2. cost information for operational control, and
3. measures of inventory value and cost of goods sold for financial reporting to investors, creditors, and other external stakeholders.
a. For example, a marketing manager wants to know the cost of performing a setup for a marketing run in order to compare it to a target cost established as part of a process improvement plan.
b. An executive wants to identify the profitability of several product lines to establish the optimum product mix.
c. A financial manager wants to know the manufactured cost of inventory to appear on the balance sheet of the annual report.