Q:

Why is cost classification important to managers?

A:

Quick Answer

Cost classification, a process of cost accounting, is important to managers because it helps them make decisions that keep departments on budget and maximize future profits. Cost classification groups put similar costs together to aid in managerial decision-making.

Know More
Why is cost classification important to managers?
Credit: Diamond Sky Images The Image Bank Getty Images

Full Answer

According to About Business Finance, cost classification as a part of cost accounting provides managers with a close look at the fixed and indirect costs of manufacturing products or providing services. Cost classification helps management set up cost control programs to keep expenses down and stay under budget by clearly showing which expenses are inflexible and in what areas savings are possible.

Learn more about Managing a Business

Related Questions

  • Q:

    What is organizational restructuring?

    A:

    Organizational restructuring is the process by which an organization changes its internal structure by revamping departments, ownership, or operations and processes. The purpose of restructuring is to make the organization more profitable and integrated. Restructuring is usually a result of a merger, lackluster profits or a change in overall goals.

    Full Answer >
    Filed Under:
  • Q:

    What is a city manager plan?

    A:

    According to Regents Prep, the city manager plan involves the hire of an administrator by the city council to manage the departments of a city government. This form of municipal governance is in contrast to the election of a city mayor.

    Full Answer >
    Filed Under:
  • Q:

    What is the difference between line and staff authority?

    A:

    Line managers direct the work of subordinates and make important decisions, while staff managers advise those with line authority. Moreover, line managers are directly accountable for sales and production target achievement, whereas staff managers extend support to help them achieve their goals.

    Full Answer >
    Filed Under:
  • Q:

    What are the disadvantages of knowledge management?

    A:

    Knowledge management has many disadvantages, including dependency on knowledge contributors, creating confusion among managers and employees, and the mishandling of valuable company information. Failure to use company knowledge properly can lead to a great loss of time, resources and even organizational failure.

    Full Answer >
    Filed Under:

Explore