Costing Systems Flashcards
1
Q
Purpose of information
A
Businesses gather info from these sources:
1.Sales transactions (how many units sold)
2. Data on costs (cost of making one unit)
3.Records of employees (personal details)
4.Inventory files (how much raw materials are used in warehouse)
2
Q
Using the info
A
Business managers will use this info
Decision making:
Short term decisions- Which products to make and how much raw material to order
Long term decisions- Which products to stop making and how many staff to employ
Planning:
Need to look at long-term operations. Involves prepartion of budgets
Control:
Managemtnet concerened with how business is performing in comparision with budgets
