Summary |
This book is concerned with the financial information that management needs for making short-term operating decisions. (A short-term decision is one that will be effective for a period of one year or less.) Specifically, the book covers cost accounting, cost analysis, and budgetary control. It does not cover capital investment analysis, long-term profit planning, or decentralized profit control techniques, because they relate to long-run operating decisions.
The purpose of internal accounting and financial data is to provide management with information for making intelligent decisions. The effectiveness of a cost accounting and control system can be measured in terms of the usefulness of the information it provides to management. Throughout the book, the criterion that has been used to evaluate cost accounting and budgeting techniques has been the value to management of the data that they produce.
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