The CFO told you that the front line supervisors are not very good at understanding accounting data and how it can help them control costs. He asked you to meet with all of them to discuss the following points:
- What is the profit formula, and how can understanding the profit formula help give focus to the organization's cost-reduction efforts?
- Describe and explain at least 4 of the different types of cost categorization methods:
- One must be fixed costs versus variable costs
- One must be value-added versus non-value-added costs
The other two can be of your choice
- Which of the 4 methods is the most meaningful method to categorize costs, and why did you choose that one?
- Explain how different scheduling methods can impact a firms costs
Summary of the gross profit definition, the different types of categorization costs, and how scheduling methods can reduce costs.