Case Study: How A Cost Accounting System Improved Efficiency And Profit

Client

Ann Marie owns a manufacturing business which makes a high-end product. She varies her design from time to time so there are many versions of her primary design.

Problem

Ann Marie did not have a cost accounting system that would determine the cost of producing each version. So she did not know which ones were cost-effective to produce and earn her more profit and which ones were not.

Solution

She engaged her Accountant to select an appropriate cloud-based cost accounting system to tailor to her needs.

The Accountant analyzed the manufacturing process and determined the basic activities involved. The next step was to create a system which would:

  1. Measure how often each basic step is performed in producing a design.
  2. Determine the cost of each step in the manufacturing process.
  3. Use 1 and 2 above to determine the cost of each design.

Ann Marie enthusiastically uses her new cost accounting system to:

  • Measure profits derived from the sale of each design.
  • Target low-profit designs for discontinuation.
  • Help determine pricing of new designs.

Benefits for the Client

The system allowed Ann Marie to measure production efficiency and thereby grow her profit and business.

2017-11-29T11:37:21+00:00November 29th, 2017|Business Advisory|Comments Off on Case Study: How A Cost Accounting System Improved Efficiency And Profit

By continuing to use the site, you agree to the use of cookies. We protect your data, learn how here...

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close