The right way to control period expense
Article Abstract:
Salaried expenses are typically controlled by management by eliminating a percentage of jobs, but this often has led to an increase in total period cost expense for the process and does not adequately identify those job functions rather than jobs per se that should be eliminated to increase efficiency and reduce period expense. Management must use the same techniques used for direct material and direct labor costing for the costing of period expense. Cost analysts must eliminate unnecessary, redundant, and inefficient work elements from jobs by identifying the procedures, practices, and conditions that cause costs. Work should be performed only if it is necessary for the business' efficient operation or due to the requirements of the law. Work activities should be broken down into input, conversion, and output. If there is no conversion or value added in the process, the activity should be eliminated as unnecessary. Work activity without output that does not meet the two criteria should be eliminated, and all inputs to eliminate activities should be eliminated consequently.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1990
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One day closings
Article Abstract:
Turner Construction Company operates 20 offices throughout the United States. Prior to January 1985, the company's accounting was centralized, but its management was decentralized, which led to a great deal of duplication of financial records, and slowed down the consolidation and closing of Turner's financial records related to daily transactions. The company solved this problem by implementing a information system in which each office bypassed the company's mainframe and ran a trial balance on the office microcomputer. An accounting and communications program designed by IMRS, a Connecticut software firm, was implemented for the reporting and consolidation of financial data.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1987
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