Question

Explain why ensuring the proper calculation of standard cost amounts should not be the sole responsibility of a company's cost accountant and provide examples of individuals who been involved in such calculations.

Answer 1

The above typed statement is very much true.

An organization is dependent on various direct and indirect wheels to run its business car so how one type can be blamed for the failure of the business projects.

In the similar sense a cost accountant should not be solely responsible for the proper of Standard Cost amounts.

There are various departments and each having its own specialised staff like Production, sales, marketing, procurement ,service etc. Each of them working in an environment that they are comfortable with.

Now taking some examples

Ex 1 When deciding the budgeted costs for various raw material ,inputs then the cost accountant should work in harminy with the procurement and production department to know the basis he should rely on to make the estimates of such cost whether he should rely on historical cost techniques or new market patterns.

Ex 2 While deciding the Selling costs he should work in harmony with the marketing and sales to make sure that what will be the areas they are Targeting to achieve and what will be their strategy regarding cost.Whether the cost estimation are realistic or they have no base. another thing he should check is how the bugeted costs meet the actual to know the variances and make an appropriate judgement of the various costs.

Concluding above there are n number of examples to be discussed and focused upon.

In nutshell it can be said that the cost estimation is the term not only for the cost accountant. It is the responsibility of all the department of an organization where we should be above than I and the various departments should work together with the cost accountant to meet the targets of Costs.

Moreover it is also the duty of a cost accountant to ease out a way so that he can work properly with the whole organization personnel. In addition to that he should make the arrangements to find out the sources on which he can rely and the cases where substantive checking is required to be performed.

He should respect the work of other while relying in the past trends and make a plan to best comply with the standards to achieve the best bugeted production costs.

A Cost Accountant is the one who deals with all the other related matters of an organization but every department should work in alignment with him to achieve the best possible results for effective measurements of costs.