Business and Management
Submitted By delanona
1. What does the term cost management mean? Who in the typical firm or organization is responsible for cost management?
= Cost Management is the process of effectively planning and controlling the costs involved in a business. The one who’s responsible for cost management is management accountant. 2. List the four functions of management. Explain what type of cost management information is appropriate for each.
= 1. Strategic Management. Cost management information is needed to make sound strategic decisions regarding choice of products, manufacturing methods, marketing techniques and channels, assessing customer profitability and other long-term issues.
2. Planning and Decision Making. Cost management information is needed to support recurring decisions regarding replacing equipment, managing cash flow, budgeting raw materials purchases, scheduling production, and pricing.
3. Management and Operational Control. Cost management information is needed to provide a fair and effective basis for identifying inefficient operations and to reward and motivate the most effective managers.
4. Preparation of Financial Statements. Cost management information is needed to provide accurate accounting for inventory and other assets, in compliance with reporting requirements, for the preparation of financial reports and for use in the three other management functions. 3. Explain the difference between cost of goods sold and cost of goods manufactured.
= Cost of goods sold is the cost of the inventory that has been sold.
Cost of goods manufactured is the cost of the goods finished and transferred out of work in process during the production period.
COGS : added beginning inventory; COGM : don’t need to add the beginning
4. Following is a list of costs from Oakland Company, a furniture manufacturer:
1. Wood used in chairs = direct, VC
2. Salaries of…...