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Class+6+Learning+Objectives+_1_ - 3. How to develop...

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Summary of Key Learning Objectives for Indianapolis City Services (A) The Indianapolis City Services case continues the theme that we started with Kanthal, of using accounting cost data for purposes other than product costing. Specifically, in this case, we see the design of a cost management system for purposes of process improvement and competitive pricing. The case illustrates: 1. The application of activity based costing methods in a service operation and a not-for-profit organization. 2. The use of activity-based information for process improvement. In particular, we see that after designing and ABC system, the manager has two pieces of information: the cost of activities and the level of activity. Strategic cost reduction requires devising plans to either do less of the activity or to become more efficient at the activity.
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Unformatted text preview: 3. How to develop relevant costs for make-buy decisions. 4. A novel approach to change management that is facilitated by the implementation of cost management approaches in an environment where profitability and cost reduction typically have not been primary objectives. 5. As we have seen before, management accounting practices are dictated by management information needs not accounting rules. Managers are free to design systems to support their competitive strategies. This freedom carries with it the responsibility of re-designing information systems to support new strategies. Failure to maintain the alignment of management accounting systems with current strategies risks undermining the strategy through ill-informed decisions MGT 170 Managing Cost and Quality Prof. Shannon W. Anderson...
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