Page 156 - Finance for Non-Financial Managers
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Cost Accounting
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more challenging for a manufacturing company because of
the complexity of the business.
❏ Cost accounting is possible only when the detailed costs of
production are collected at the source, on the shop floor.
❏ Understanding how costs behave is key to controlling
them. Tools such as standards and budgets and classifica-
tions like “controllable,” “variable,” and “direct” help us to
do that.
❏ Variance analysis is the way managers use standards and
management by exception to attempt to reduce variation
from predicted outcomes.
