Resource usage a conceptual framework the fundamental

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Unformatted text preview: . However, senior management makes no effort to determine, for example, the cost of kitchen labor included in each meal. As a result, the cost of goods sold on a restaurant’s financial statement refers only to ingredients, and not to labor. Role of Senior Management As the above discussion suggests, if senior management sees a need for cost information, it can compute costs in a variety of ways, many of which can be defended as valid. However, because the cost-accounting effort is inherently complex in any good sized organization, some approaches to computing full costs can produce quite misleading results. Moreover, in many organizations, the cost accounting effort is complicated by questions of product or ____________________________________________________________________________________________________________ David W. Young • Management Accounting for Managers • Chapter 1 Page 3 Copyrighted Material. Do not reproduce without written permission. service mix, standby capacity, customers’ use of related products and ser...
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