You have been employed as a cost accountant since a few years. You suspect that the...

You have been employed as a cost accountant since a few years. You suspect that the commercial manager is over-billing customers

Expert Solution

Cost accountant role in company is to calculate actual costs & prepare budgeted costs of production. He is also responsible for calculating variances in actual costs & budgeted costs. This is very broader description of role of cost accountant. There is also one another role of cost accountant that is important, this is to determine the viability of any new product that company is planning to launch in the market. Here cost accountant determines the cost of new product & compares it with the selling price on which marketing department plans to launch the product, after that gives decision whether company should launch the new product based on profitability of product. Whereas on the other hand role of commercial manager is to create the market for company products & sell those products. He is also responsible for deciding on which price the market would absorb the product. So, commercial manager is rsponsible for determining selling price of product & cost cost accountant is responsible for calculating cost of products. Both have different roles.

Based on above discussion we can say that cost accountant should not interfere with working of commercial manager. Commercial manager is responsible for billing to customers, so cost accountant does not have any say in determining whether commercial manager is over charging customers. Cost accountant should only determine the cost of product correctly & leave pricing to commercial manager.

ekkarill92 answered 2 years ago

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