Cost Accounting Case Study Example | Topics and Well Written Essays - 1000 words

Cost Accounting - Case Study Example in the coordination of activities and functions within the corporate framework of the firm as well as helping administer each of the functional areas or activity centers of the company. The ability of internal managers to plan and control the activities within the company rely heavily upon the timeliness and quality of the financial and cost information provided by accounting. Cost accounting provides the necessary internal financial framework for management to plan and control the firm’s activities while providing feedback (Horngren & Foster & Datar). The concept of feedback refers to the ability of management to examine past decisions and financial performance in order to better formulate the companys strategy for the future. The three major functions of modern accounting systems are: To help internal management plan, control and make regular everyday decisions- This routine information helps managers better manage their firm resources, assist with strategic short and long term planning, and determining product/service cost or total costs by allocating the different direct and indirect expenses to the appropriate cost driver or activity. Non-routine internal reporting- There are many instances when a manager or internal decision maker needs to have specific internal financial information that is not normally reported under their standards accounting system which involve some new potential capital investment or activity. Financial external reporting to stakeholders- Investors, banks, government and other outside parties require information regarding the firms past financial performance and financial reporting provide the means for these parties to learn about the companys operations and overall financial performance. There are different approaches in modern cost accounting to help managers determine the total product service or service costs, as well as allocating expenses to the appropriate product or service within their business portfolio. The design of