Controlling 2

• Planning, Auditing and controlling
• Preparation of controller´s instruments

• Choice of company site
• Choice of technology used
• Make-or-Buy decision

• Guarantee quality
• Ensuring appointments and dates
• Searching for continuous improvement

1. Cost type accounting: reasons for the costs
2. Cost center accounting: in which sector costs
3. Unit costing: will we be competitive
4. Operating profit statement: produced profit or losses

• Correct allocation of costs to cost types
• Appropriate and orderly publication of cost
• Mainly oriented to the past and seldom future-oriented

...has to be: 

• updated
• future-orientated
• certain
• flexible

...should avoid:

• Lack of approaches for activity-based costing
• Lack of market references
• Insufficient future-orientation

• Technical administration
• Business administration
• Logistical processes

• Purchasing
• Manufacturing
• Production-logistics
• Marketing
• Sales

Traditional

Bottom-up-approach: how high are the costs, calculation on well known principles?

Modern

Top-down-approach: how high are the allowed costs, calculation by new and innovative principles?

→ Modern cost accounting is very long-term oriented

Crucial costs are decision-relevant costs which can be changed or influenced by a management decision.

Example:

If you want to produce a new product and you have enough capacity, only variable (“additional”) costs have to be considered; fixed costs caused by the production line won’t change by the decision to produce a new product. In this situation you are not forced to invest in new capacity!

• Direct and variable costs
• Fixed costs of the company´s products
• Fixed costs of the company´s divisions
• Fixed costs of the whole company

A decline in the sales volume → rise of the costs per unit due to constant fix costs

• Direct costs: material and labor
• Variable overhead costs: costs of maintenance
• Product fixed costs: product-specific machines
• Fixed costs of product family: assembly line for a product
• Fixed costs of division: building costs
• Fixed costs of company: head quarter of the company

The costs are allocated to costs pools; there is never a proportionalization of fixed costs