I have been asked by Management to set up a good Cost And Management Accounting System but the first thing I have to understand are or is the main purposes/objectives of having a Cost And Management Accounting System?

Answer:

The system should at least meeting the following requirements:

·     To allocate costs between cost of goods sold and inventories for internal and external reporting;

·     To provide relevant information to assist managers make better decisions and

·     To provide information for planning, control and performance measurements

It is advisable that a database needs to be maintained with detailed cost appropriately coded or classified to enable the Management or Cost personnel to extract relevant cost information to meet the aforesaid requirements.