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Finance and Management - Essay Example
Finance & Accounting
Pages 7 (1757 words)
Date Product cost and budgetary control methodologies and systems The development and maintenance of costing and information systems in organizations is a principle function that ought to be undertaken by any organization that operates in the contemporary society…
This involves the value of raw materials, the work in progress and the finished goods ready for sale. It is the work of the cost accountants to place all costs under consideration so that they are able to determine the value of all inventories (Martin & Wolf, 2008). Cost accounting system has a function of bringing maximum efficiency in an organization. Cost efficiency would ensure that direct material costs, labor and manufacturing are identified and cost controls performed well. This is done by calculating all these costs, adding them up and calculating the cost per unit. Cost accounting systems also facilitates the decision-making systems in any form of organization. The decisions made are both long-term strategic and short-term decisions. In decision making estimated costs are compared to the actual costs and this is only applicable in organizations, which undertake budgeting as one of their strategic objectives (Martin & Wolf, 2008). Product costs are major components of any product manufacturing system. Product costs are traced all the way from the costs of manufacturing up to the point when production is complete. ...
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