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There are many important and interesting extensions of the material in Chapter 13 (cost accounting and...

There are many important and interesting extensions of the material in Chapter 13 (cost accounting and reporting) and a lot going on out there beyond the scope of this initial look at Cost Accounting and Reporting. So I’d like you to do a little digging this week for our discussion topic.

I’d like you to choose one of the following three topics (one may interest you more than the others), find an article, provide a summary paragraph, and provide a paragraph on your perspective now as you’ve looked a little deeper into the topic:

- The Value Chain and Strategic Cost Management
- Absorption Costing vs. Direct (Variable) Costing
- Activity-Based Costing

Solutions

Expert Solution

Value chain analysis is the model formulated by Michael Porter which suggested that value can be added to the business from buying of raw material, producing finished goods from the raw material and selling final product to the customers.

Strategic Cost Management is the overall recognition of the cost relationships among the activities in the value chain, and the process of managing those cost relationships to a firm's advantage. Also known as Cost Management Theory. Strategic cost management is a program established businesses use in order to regularly identify and analyze cost drivers to lower costs and maximize total value. Strategic cost management is blend of

- value chain analysis (how we organize our thinking about cost management?)

- Strategic positioning analysis (what role does cost management play in the firm?)

- & cost driver analysis

Through following three components, the company can position itself against Framework of strategic cost management programs :

-  core functions: in which management must define the nature of the business and its courses of actions

- The next component focuses on the added value of activities such as customer service, technical support, marketing, sales and manufacturing.

-  The last components of the framework are the activities that support the core activities. These include IT, human resources, general administration, accounting and finance

Referencing:

http://www.raijmr.com/wp-content/uploads/2017/11/IJRMP_2015_vol04_issue_02_03.pdf

ekkarill92 answered 2 years ago
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