Cost Accounting

I worked for several different companies, all in manufacturing. It is amazing to me how the system cost can be so different from place to place.

On my initial appointment Cost Accounting I had the good fortune to be taken in a society that was pro-cost accounting. In truth, the CEO asked everyone to support the effort. We have developed a system of cost activity that was the envy of many. I can honestly say that the costs were accurate in the system.

Later this company was bought by a big company that has reduced to a very low-cost standard diluted. It was miles from where we were. The costs were a joke after having had such a meaningful system.

Then I went from bad to worse in a very large company that does not worry at all costs. The engineering unit was running the company. What a disaster it was.

So, from my point of view the value of cost accounting must be explained to the people who run companies. What a misuse of a company to remain committed errors in the reasoning for the reason that they do not know their costs.

Cost accounting is really critical to the survival of a society. There are many who think that accounting is a non-value added costs, but how wrong they are.

If management does not know what it costs a product or service, then how can the business be profitable. Sure, some people and businesses are lucky and happen to be profitable, despite uninformed decisions. However, in the very competitive world we can not rely on luck .......