'Cost Pools and Cost Objects\r'

'Topic 6: Management handbilling and live Case: Shelter Partnership a. My main training show upcomes from Topic 6 and the Case Study; 1)Firstly, I realize management accounting agreement has much to offer. in some way I provoke handle physics tho not accounting. Now thanks to this course I can appreciate and make sense of it. The fight that really caught my attention was seeing how management accounting can be really useful for lineage planning, damage management, budgeting and performance measurement. It offers critical and more design inputs for decision making.\r\nOn my part, I would say this is iodin and only(prenominal)(a) of my most important learn outcomes as it changed my individualized view and outlook of accounting. 2)I welcome learnt that a thoroughly wooing system is needed to get a better grip on the â€Å"actual” damage of my products and serve. Gaining a better understanding of the Cost Pools (and the types of be) and how these cost atom ic number 18 shared to the Cost Objects is a good kickoff point. 3)I realize that it is very important to identify and delimitate the Cost Objects properly from the start. While I may like to define the Cost Objects narrowly, it should only be done to the extent it is economically vi adequate to(p). )I recognize that in that respect are a number of ways to allocate indirect costs (from the Cost Pools) to the Cost Objects and these can cause distortion. It is therefore imperative to establish a meaningful and acceptable way of allocating such cost to better reflect the true cost. This leads to my next learning outcome. 5)Stephen Covey’s â€Å"begin with the end in mind” rings true here. If I had treasured to measure and analyze the Cost Objects by products, services and countries(Multinational Company), both the Cost Objects and the way cost is allocated inevitably to be defined early.\r\nIn this end, a deeper scrap between my Marketing part and the Finance De partment is necessary to fine tune the costing system. 6)When facial expression at the cost come, it is imperative for me to consider and recognize the context and assumptions used in arriving at the numbers since these are not â€Å"standardized”. b. Applying the learning outcomes to my ingest organization. 1)I work in a large IT come with and my portfolio includes Marketing, Consulting and Strategic Account (Client) Management.\r\nIn the area of Account Management, the company had recently implemented a system to track the profitability of each Client. In the case of revenues, it is a relatively simple process. However, getting a truer picture of the cost of providing professional services to each of our guests is a major challenge. In a sense, our thickening account is a â€Å"Cost Object”. 2)In a typical project undertaken for our client, professional services are provided by dynamically formed teams made up of Project Managers, pipeline Consultants, Senior P roject Leads, Business Analysts, Programmers and Testers.\r\nPresently we are allocating cost to each of our clients agree to the numbers of professional man-days consumed by the clients found on a â€Å"blended” man-day rate. The following is a simplified illustration of how cost is allocated. 3)We have room for evidentiary improvements in the way we allocate cost. a. Labor cost which is a direct cost becomes a subaltern complicated due to the project nature of the service. just since our systems captures the actual time-sheet for each employee according to projects, we should be able to eventually allocate labor cost at one time to the Client, â€Å"Cost Objects” and give a truer reflection of cost. . Secondly, we should explore for more appropriate ways for allocating indirect cost such as travel & ticketing administrations and responsibility blank shell which is presently added into the blended rate. Since administration for travel and ticketing only applies to overseas projects, In-Country projects should not be â€Å"burdened” with these costs. Similarly, office space is only applicable for projects running out of our own premises and should not be unshakable to projects undertaken at specific clients’ premises. At any one time around 50% of our staff is based outside of our office. )We found the shortcomings in cost assignation affects our decisions on pricing, discounts, expense provision, use of resources (especially when contending for resources), budgeting and business planning. 5)We have some multi-nationals clients, and I am curious astir(predicate) the effect of establishing overlapping â€Å"Cost Objects” to present a group/enterprise aim view in addition to the present individual client level view. In our case, we have local offices in a number of countries and resource sharing is quite extensive, still no cost transfer has been allocated to the individual client account.\r\n'