Installing a costing system and problems that can arise posted by
What things would you take into consideration while installing a costing
Following things should be taken into consideration while installing a costing
-Nature of the Product is a very important deciding factor in installing an
effective costing system.
-Nature of the Organisation should be considered before installing costing
-Objectives of the Organisation should be met with the installed costing
-Manufacturing Process: Before installing the costing system the technicalities
of the manufacturing process should be studied carefully.
-Technical Details of the business must be studied before introducing new
-The system should be informative and simple. The system should be simple and
easy to use in order to maintain various cost records.
-Reporting Systems: The costing system should be designed in such a way that
reports are generated in a proper way to facilitate the cost control decisions.
-The costing system should be elastic and capable of adapting according to the
What problems you may face while installing a costing system?
While installing a Costing System an Organisation may face the following
-Lack of Support from Top Management Resistance and non cooperation from the
-Shortage of trained staff
-Non suitability for the nature of product and nature of business
-The cost involved in installing this system may be too high.