Decision Analysis and Cost Control : Assessing and Improving Costing in Organizations

The creation, operation, alteration, and cessation of every action and function in an organization -- whether within the private, public, or voluntary sector -- all consume economic resources. Measuring, accumulating, and assigning those resources to the organization's various processes and outputs allows the structure and operation of the organization to be explained, understood, and improved. Costing, the accounting term that embraces these processes and expresses them using money as a common language, lies at the heart of managerial accountancy and, exercised intelligently, is among the most powerful disciplines available to professional accountants. Costing contributes to an understanding of how profits and value are created, and how efficiently and effectively operational processes transform input into output. It can be applied to resource, process, product/service, customer, and channel related information covering the organization and its value chain. Costing information can be used to provide feedback on past performance, and to motivate and change future performance. Costing is thus an essential tool in creating shareholder and stakeholder value. Given its importance and breadth of scope, it is unsurprising that many different costing methods exist, both in the literature and in practice. This can create confusion and uncertainty for managers, to need a sufficient understanding of sound costing principles to be able to select and apply useful approaches. Beyond the scope of many research papers and books that emphasize the role of professional accountants who are working in globally competitive arena. This analysis provides empirical advances to the organization by encouraging and facilitating the global development and exchange of knowledge and best practices to assesses and improve costing in organizations