Cost Management Essay -- Accounting Finance Business Essays

Cost Management On page 92 of our textual matter it says that committed costs atomic number 18 costs arising from the possession of facilities, equipment, and a base organization. Discretionary costs are determined by management as part of the periodic planning process in order to equal the organizations goals. They redeem no obvious relationship with levels of skill or output activity. Therefore my assumptions of Committed and Discretionary costs are as follows.Committed CostsDiscretionary CostsAdministrator$60,000friend$35,000Accounting and Billing$15,000Two Secretaries$42,000Consulting$10,000Supplies$35,000Salaries$46,000advertizing and Promotion$9,000Transportation$10,000 captain Meetings and Dues$14,000Security$12,000Two Social Workers$70,000Custodial$13,000Totals$166,000Totals$205,000When I first took a look at this assignment, I thought it would be a office difficult to prove my point by using the text as a reference guide. I did that my citing the definition, but I a m departure to rely on what I know as a autobus of a business to answer these questions and I was told that real world experiences are almosttimes better that citing them from a text. Therefore, I am going to channelise a stab at this.I feel that Dr. White call for to take a look at theses areas-* Salaries (for assistant and dickens secretaries and for ii sociable workers)* Supplies* Advertising and Promotion* Professional Meetings and DuesMy first question as I was reading this assignment was What do they need with an Assistant and two secretaries? Where do they hold their meetings? What do they need two social workers in each of the two areas for? Why are they authoriseing $35,000 in supplies? I also referred back to my previous classes in team work and producing a greater output in half the time. This is not needed here. This is a mental health facility and as hard as it might be at times, they can cut the two secretaries to the administrator. I debate that peerless wo uld suffice and the administrator has an assistant. They can also cut the social workers down to one per shift area, or one for community health and one for mental health. This outpatient clinic has operational costs of $371,000 with $205,000 being what I ... ...clinics long-run prospects. (Managerial Accounting pg 93) I am simply recommending a simplification in certain areas of the clinic.In any business, when one becomes accustomed to mental process in a certain manner it is difficult to identify and unwrap what is costing you money, particularly if it is personnel. I am very familiar with this as this is one area where I am forced to make a lot of cuts. A lot of times it is like cutting your nestle off to spite your face. I will honestly admit that this is one area that is the absolute hardest for me, as these people become like family. Advertising and promotional items are essential to any business but when you spend more money to promote a company, than what you are bring ing in, you have a serious problem. Therefore, with this said, I would advise Dr. White to prepare for a reduced budget by analyzing what is costing her the most money, and make a decision in those areas as to how to scale them back. It will not be an easy task, but I feel that I have offered her some viable alternatives.Works Citedwww.nationalpen.comHorngren/Sundem/Stratton-Introduction to Management Accounting, 2005, Upper Saddle River, New Jersey.