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Uses of costing information Costing information
1.Cost behavior( varying levels of activity) 2. Scrap costs, material costs and quantity per unit of production 3.Labour cost for a unit of production or per period of production 4.Cost per unit of production or service for a process 5.Cost of running a section, department or factory
Uses by management
1.Profit planning, make or buy decisions, cost control 2.Material cost control, production planning 3.Production planning, decisions on alternative methods, wages cost control 4.As a factor in pricing decisions, production planning and cost control 5. Organizational planning, cost control
Cost and financial accounting is not the only information required for management decision making but it’s the most important if not a crucial factor. Decision making is concerned with the future and with the future costs and revenues.