Responsibility accounting and cost control

Can a company successfully implement just-in-time and other continuous improvement concepts while retaining a traditional responsibility accounting control system?

Overcoming the stovepipe organization. Although the jury is still out on this question, a number of field research studies indicate that accounting based controls are playing a decreasing role in companies that adopt the lean enterprise concepts. Changing concepts of accounting-based control.

Responsibility accounting compared to other concepts: Of course, a system that prevents teamwork and creates excess is inconsistent with the lean enterprise concepts of just-in-time and the theory of constraints.

Advances in Management Accounting 3: In my view, this concept is rarely, if ever, applied successfully in practice because of the system variation present in all systems. It also provides a way to motivate lower level managers and workers.

Provided by James R. Individuals in the various segments and functional areas are separated and tend to ignore the interdependencies within the organization. A controversial-issues approach to enhance management accounting education. Ignoring the interdependencies prevents teamwork and creates the need for buffers such as additional inventory, workers, managers and capacity.

For this reason, critics of traditional accounting control systems advocate managing the system as a whole to eliminate the need for buffers and excess.

Russell Ackoff quotes and f-laws. In a study involving nine companies, each company answered this controversial question in a different way by using a different mix of process oriented versus results oriented learning and control information.

What is responsibility accounting? Information flows vertically, rather than horizontally. In addition, assigning responsibility to lower level managers allows higher level managers to pursue other activities such as long term planning and policy making.

Some other related summaries: These elements include revenue for a revenue center a segment that mainly generates revenue with relatively little costscosts for a cost center a segment that generates costs, but no revenuea measure of profitability for a profit center a segment that generates both revenue and costs and return on investment ROI for an investment center a segment such as a division of a company where the manager controls the acquisition and utilization of assets, as well as revenue and costs.Responsibility accounting involves a company's internal accounting and budgeting.

The objective is to assist in the planning and control of a company's responsibility centers—such as decentralized departments and divisions.

Responsibility accounting allows the company and each manager of a. Responsibility accounting has been an accepted part of traditional accounting control systems for many years because it provides an organization with a number of advantages.

Perhaps the most compelling argument for the responsibility accounting approach is that it provides a way to manage an organization that would otherwise be unmanageable. Responsibility accounting. The term responsibility accounting refers to an accounting system that collects, summarizes, and reports accounting data relating to the responsibilities of individual managers.

A responsibility accounting system provides information to evaluate each manager on the revenue and expense items over which.

RESPONSIBILITY ACCOUNTING Chapter 12 I. CHARACTERISTICS OF RESPONSIBILITY ACCOUNTING only those items over which a manager has direct control are included in the responsibility report for that management level.

What is Responsibility Accounting?

- there are three types of responsibility centers: (1) expense (or cost) center. (2) profit center. (3). When the manager of a responsibility center can control only costs, the responsibility center is referred to as a cost center.

If a manager can control both costs and revenues, the responsibility center is known as a profit center. RESPONSIBILITY ACCOUNTING Management Accounting - Responsibility Accounting Planning & control are essential for achieving good results in any business.

Firstly, a budget is prepared and, secondly, actual results are compared with budgeted ones.

Responsibility accounting and cost control
Rated 0/5 based on 67 review