Cost Accounting and Manufacturing

[John Baker]

Although I'm retired and have been for some time, I get questions concerning specific topics related to the costing methods/systems that accommodates the allocation of value to inventory and the best fit of accounting for such. In today's economic environment, the differences between manufacturing plants as cost centenars Vs manufacturing plants as profit centers, has challenged even the best of us in this profession.
Would you think that a separate title - Cost Accounting for Manufacturing - would be worth while. I have yet to see a forum that takes on such a topic. Possibly with good reason(s), given the dynamics of that portion of our profession.

 

[Becky]

Thanks for the suggestion, John! By separate title, do you mean you would like to see a separate sub-forum?

 

[John Baker]

By a separate sub-forum you mean a heading classification, like the one I posted to, relative to this topic?
Well, perhaps.

From my experience, I think an effort helping those entering this specific field, understanding the dynamics and reasoning that often challenges the textbooks*, and even professional pronouncements. The multilayers of old-school thinking, has gone the way of the dodo, leaving the managerial accountant striding other demands, not just accountancy.

So my suggestion would be, if there's a demand for asking .. "How come," then I can see a purpose. Marginal interest can be satisfied as is.

Excellent web site by the way.

*My very first position, right out of college, was with a large, Fortune 500, manufacturing company. Day two, I was called into
the controller's office and welcomed to his staff. Just before sitting down, the man pointed to a row of books in his office and
instructed me to pick one, any one. I did, and he extended his hand and took the book. He then randomly opened the book and
placed it on his desk. He then told me,
"What's in this text book, stays in the text books. We do things differently here. I you have any problem with that, there's a perfectly good staircase that will show you the street."

 

[Becky]

Yes, by sub-forum I mean similar to "General Accountancy Discussion" or "Technical Queries". I don't think we've had many questions relating to Cost Accounting for Manufacturing, but if this changes I would certainly consider adding a sub-forum for it

I'm really glad you are enjoying the site!

 

[Werner Reisacher]

I love love your discussion. And I know exactly where you are coming from John. I am retired from corporate life, reached an age that puts me on the top of the list of the "endangered species" from a virus point of view.
I lived all my life in a global multicultural environment. I feel equally comfortable in a Board Room with other executives or having an interesting dialogue with a worker on the shop floor, listening to his proposal on what would have to change in order for him to become more effective, without having to work harder or longer hours.
It's called process control and implementing processes that achieve both, increased productivity and profitability - simultaneously.
Unfortunately, controlling processes is not an issue that should remain the sole domain of Engineers and Cost Accountants. The entire economy is built on processes.
The present situation our economy is in should make us start realizing that doing business, as usual, would be a fatal option. No CIO would survive in his job if he neglected to implement firewalls and virus protection systems. Since the life of precious digital data is at risk. Protecting us against a biological virus attack was in nobody's plan B, despite the fact that we all perfectly know that social distancing will always be the first line of defense against such an attack from within. As a result, we put both, our biological and our economical lives at risk.
We do have RFID, voice recognition, face recognition, and many other technologies available that allow us to operate paperless and touchless. Why are we not using those technologies outside the gaming and the entertaining sector of the economy? The many industrial revolutions have resulted in an incredible increase in productivity in the manufacturing side of the economy. But I do not even know one method that allows measuring the productivity in the office environments, in particular accounting.
The shining Knights offering products delivered to our doors at the lowest market prices are so needed these days. How they are able to put another layer of extremely profitable business on top of the existing cost structures of their suppliers at a lower price is a miracle.
We both know when it comes to the economy there are no miracles but a lot of smoking mirrors.
Part of the price we are paying on top of the purchase price of the goods we consume is being totally dependent on one single source of supply for vital health products. Once that one is solved, we as individuals as well as employees, well be totally exposed to the one source of supply of all our products, since the purchasing power of the shining Knights, having built a one-mile fire wall between the economy and our door will decide what the price of their goods will be - the only supplier in town. And nobody enters that last mile without paying the "bridge toll".