Management System and Give Its Three Purposes Essay

Pages: 2 (621 words)  ·  Bibliography Sources: 0  ·  File: .docx  ·  Topic: Business

¶ … Management System and Give Its Three Purposes:

A cost management system (CMS) is developed by accountants for the purpose of supporting their manager's decisions. Cost management systems are not the same as cost information or financial statements. In order to make good decisions, managers need detailed information about the financial situation of their companies. The information must be accurate and timely, and CMSs include the costs of individual services, products, services, and all costs associated with the value chain of the companies. There are three kinds of information at CMS provides:

cost information for strategic management decisions;

cost information for operational control; and

measures of inventory value and costs of goods sold for financial reporting investors (121).

If a company is going to make a major move in the market place -- for example, moving from an online-only store to a brick-and-mortar store -- the management would use the information from the CMS to inform the decision-making process. A CMS also can show managers where money is being spent inefficiently.

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Managers require specific information about all aspects of their company's internal economy to make good decisions about the direction of their business. Accountants in the company support the managerial functions by creating cost management systems (CMS). Creates through cost accounting, the CMS contains the specific information managers need to make choices: product, service, customer, and process costs. Knowing these individual costs will enable the manager to choose the optimal customer mix and value-chain functions, investment decisions, strategies, etc.

Essay on Management System and Give Its Three Purposes: Assignment

As cited in the text, Dell decided in 2007 to begin selling its computers in retail outlets (121) Managers could not have made this decision without the information provided by a detailed CMS.

A CMS provides the following:

1.

cost information for strategic management decisions;

2.

cost information for operational control; and

3.

measures of inventory value and… [END OF PREVIEW] . . . READ MORE

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