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Updating Standard Cost Systems by Carole B. Cheatham

Updating Standard Cost Systems

by Carole B. Cheatham
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Book cover type: Hardcover
  • ISBN13: 9780899307169
  • Binding: Hardcover
  • Subject: N/A
  • Publisher: Praeger
  • Publisher Imprint: Praeger
  • Publication Date: N/A
  • Pages: 240
  • Original Price: GBP 85.0
  • Language: English
  • Edition: N/A
  • Item Weight: 435 grams
  • BISAC Subject(s): Accounting / General, Business Mathematics, and Finance / General

The new manufacturing environment requires new cost-accounting systems as well as new technology. While some authorities have advocated installing new and untried systems, the authors of this book recommend updating the standard cost system which 85 percent of manufacturing firms have in place. Updating the present system can achieve greater benefits in terms of providing information to managers for decision making. It also allows the organization to avoid disruption to the corporate culture and the cost associated with a new system. The authors show how standard cost systems can be redesigned to measure factors recognized to be important in today's manufacturing environment such as quality, production levels, and throughput. They demonstrate how standard cost systems can foster continuous improvement through dynamic rather than static standards.

After examining characteristics of the new manufacturing environment and benefits of upgrading the cost system, ways to update the traditional standard cost system are discussed. Revisions include a unique input-output method of variance analysis, specific metrics related to manufacturing performance, ways to identify cost drivers, and use of dynamic standards. The authors demonstrate how to redesign the information-gathering and reporting system as new manufacturing procedures are put in place. They discuss ways that marketing activities are affected and how to plan plant and equipment expenditures in an automated environment. This book is directed primarily towards accountants and managers needing to improve informational content of accounting data for decision-making purposes. It should also be beneficial to any person within the business firm who either supplies data of this type or uses it, such as project analysts, controllers, managers, and even management trainees. Academicians teaching cost and managerial accounting as well as those teaching production management and financial decision-making courses should find it beneficial as a text supplement or as a primary text in courses dealing with current problems in today's changing manufacturing environment.

CAROLE B. CHEATHAM is Professor of Accounting at Northeast Louisiana University. She is the author of Cost Management for Profit Centers and more than sixty articles which have appeared in journals such as Journal of Accountancy and Management Accounting. Dr. Cheatham serves on the editorial boards of Journal of Business and Entrepreneurship and Delta Business Review and is a Certified Public Accountant and Certified Management Accountant.

LEO R. CHEATHAM is Associate Professor of Finance at Northeast Louisiana University. He was a research economist for the Division of Business and Economic Research at Mississippi State University for ten years and as a project manager, investigated business and industry problems for the U.S. Department of Commerce and various private firms. His articles in recent years have focused on working capital management and cash flow problems for business.

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