1. Costing and
MIS
The Costing is not just a control mechanism but a
planning tool to ensure that all known and anticipated costs are covered to
ensure company creates overall operations strategy that will allow it to focus
on DISTINCTIVE ADVANTAGE, we have discussed till this point, in order to make
it simple as Basic Dash Board Design following are the questions that will
allow BOD and EXECUTIVES to find link between Functional Objectives and Control
Mechanism, One things needs to be pointed out is that these questions are
starting point to assess company operations not the final end result that needs
to be obtained and BOD and EXECUTIVES are needed to design a MIS that will
allow them to manage their own company, reason for same is quite clear strengths
and weaknesses for each organization are different but that equations changes
every time when either Market, Competitors or Technology changes and these are
external factors that company can not control and thus it becomes very
important to stay ahead of game and this questionnaire is starting point for
same.
1.
Has Appropriate Cost Accounting System is
selected for overall Organization
2.
Does Department wise Cost Centre and Profit
Centre is Well Defined
3.
Does Cost Driver Analysis for Each Department is
Done
4.
Does Standard Operations Cost is Defined for
Each Department?
5.
Does Costing System translate into Meaningful
Operations Control Mechanism?
6.
Does Target Costing Method is applied for
arriving at Efficiency Improvement and does it help individuals in benchmarking
Exercise?
7.
**Does Marginal Costing Method is Used for
Changing the Level of Production from 1 Level to Another?
8.
Does BEP Based Accounting Controls and MIS
Reporting made for Annual Basis to Manage Risk of Non-Profitable Operations
Control for Each Business Vertical or Product Group?
9.
Does Product Supply Arrangements are done with
Related Product Manufacturers to Reduce cost of Marketing Operations? (like
relationship with Dealers of Related Products done by Mechworld Eco)
10.
Does Product wise and Project Wise Contribution
Analysis is done by Company?
11.
Does Selling Price Analysis is done for
Optimized Cost Structure or Target Cost
12.
Is Man Hours Scheduling is done for Production
Planning and After Sales Warranty Activities?
13.
Variable cost per Site Analysis is ready with
Company?
14.
Does Order Fulfilment Cycle cost is Considered
while Quotation?
15.
What is Method for WIP Valuation and Current
Market Price Data Gathered on Regular Basis and compared for Variation for
Acceptable Limits?
16.
Is Cost Leadership in Process of Production and
Other Business Process is Achieved?
17.
Does Finance Cost is loaded on Carrying cost of
Inventory for Purpose of MIS to enable BOD and Executive Management identify
the Effect of Inventory Turnover Period on Finance Cost and Vice Versa?
18.
Does Inventory Valuation reflect Attributable
and Direct and Indirect Costs to ensure VALUE ADDITION identified with each
Product/ Service Sold?
19.
Does Profits attached with COGS are adequate to
Cover All Expenses and they are monitored for BEP Point across Financial Period
to ensure that Period to Period Operations Management is adequately change to
track that BEP point?
20.
Does Profits of COGS are Monitored for Future
Expenses and Reserves are created through Pricing Strategy to manage them?
21.
Does Costing System Provides Margin for Safety
in Loading of Costs itself to Monitor for Overall Operations?
22.
Does Product/ Service wise Actual Vs Planned
Cost Variance Measurement Exercise is Available to BOD/ Executives?
23.
Does Different Type of Costing and Standards
Costs, Marginal Costs and Batch Cost is Used at Different Level to ensure
Proper Primary and Secondary Cost Allocation to arrive at Proper Costing of
Products and Services? And allows Functional Heads to Control respective Business
Process in Optimized way?
24.
Does Depreciation and Impairment of Assets is
charged to COGS for Accurate Costin and Mapped for Decision Making with
Marginal Costing Approach?
25.
Does Effects of FOREX rates and its impact on
Product Cost are Mapped for Future Operations Control?
26.
Is Government Benefits and Grants are Considered
as Part of Costs or Treated as Revenue Part independent of Operations and MIS
Considers them while making Operations and Pricing Decisions or not
27.
Does Profit Centre is Maintained for All
Activities that help company to ensure Value Analysis Across All Functions?
28.
Does Cost-Benefits Analysis is applied for all
Employees and There Performance and Accordingly Incremental Cost Loading in
done for Performance Based Payments?
29.
Does Product Group/ Segment Wise Costing P&L
is prepared for Company?
30.
Does effect of Related Party Transactions is
Monitored over Costing Structure?
31.
Does Assets Acquisition decision is made based
on Aggregate Costing considering Long term Planning?
32.
DOES STRATGIC PLANNING INVOLVES COMPREHENSIVE
COST CONTROL AND COST LEADERSHIP PROGRAM CONSIDERING ACTIVITY BASED COSTING?
33.
What is Strategy used for reducing Manufacturing
Defects without increasing load of Manufacturing Cost?
34.
Use of Kaizen Approach to Improve Function
a.
SEIRI – Organization-reorganization
b.
SEITON – Neatness
c.
SEISO – Cleaning
d.
SEIKETSU – Standardization
e.
SHITSUKE – Discipline