Establish an effective cost management process for product development to
measure budget variances, identify their causes and recommend appropriate
corrective actions
According to Armstrong, (2005) it is explained that In order to administer the extent of assignment help,
time, expenditure, and the excellence in the IT assignments, the insurance companies
should utilize various cost control devices and measures which we are going to
analyze in this learning. Whatever may be the target of the project or assignment i.e.
amplification of revenues or the reduction of the costs; this study will help out to
render the best kind of measure for every type of task.
When a cost control technique is applied, it always enables the administrators and
the managers to decide properly which projects should be taken in hand and which
not. It also helps them to list these assignments according to their stage of priorities
and to make it ultimately that the requirements should whether be self made or bought
from outside by Armstrong, (2005)
ACTIVITY-BASED COSTING (A.BC) ASSIGNMENT HELP
Assessment of overhead expenses and operating expenses through relating the costs
or expenditures to the products and the services provided to the customers; is made
done through the (A.BC) or cost analysis and cost accounting. Cost financial
statements also help to point out the products and services which are losing their
customer’s interest and have started showing non-beneficiary effects on the business
and this measure can be helpful in handling such projects.= by (Wan Jamaliah ET al
1999)
Under this method, as the name suggests, the activities or the functions are
determined first and after that each activity is classified in parts so as to explain which
cost oriented are and which are not. After that the data is gathered and applied in such
a way as to make the managers decide the changes for making the project to yield
maximum earnings and be effective.
This process is known as the activity based costing because it explains how far the
performance of an activity is viable and also describes how to control it. Thus, this
measure is apt to secure more accuracy and control over the factors which effect the
costs and therefore the IT costs can be cutback from 5% to 6% every year since the
in- house customers, through this approach, acknowledge the resources, their required
quantity and their respective costs and thus they can better manage them by %J'?!
EARNED VALUE MANAGEMENT (EVM) ASSIGNMENT HELP
According to the Cooper, R. (1994) In order to judge the success of any project, EVM
method is appropriate. This method not only helps to anticipate the cost of that
assignment and the final date of its accomplishment but also reveals the differences in
the planned agenda and the budget during the process. Reliable gauge to assess and
judge against other projects is also rendered by the EVM to tell how far the
destination is so that the questions like ‘with the money spent what we got’ can be
answered by the manager of the project by associating the cost if the project to its
performance. The work till done can be contrasted with the work scheduled to assess
whether the tasks and their costs are being followed as per the schedules. Further it
makes the manager alert to complete the work within expected expenses and the time
period.
ACTION
UNFAVOURABLE VARIANCES: ASSIGNMENT HELP
• Why does at the present sales amount, a cost item go beyond its standard?
• Have the services been increased?
• Has the work force been increased provisionally or eternally?
• Is there any particular unexpected cost and whether it can be repeated?
GOOD VARIANCES:
• Why, at the present sales volume, has any cost item not touched the predicted
standard?
• Have all the expenses been accounted?
• Has the installation of the cost saving measures been done?
• In the context of sales is the decrease rational and can it be controlled and if
yes, then how?
CORRECTIVE ACTION:
The management will have to take the necessary steps to fill up the gaps, irrespective
of their kinds and reasons. In case of the unfavorable differences, the management has
to cure the problem by having regular verification of the particular items.
! The differences can be due to various regular reasons like at the time of
preparing budget, any item may have been omitted, any unexpected expenses
have taken place, entering the costs wrongly into any other account, time
lapse, lack in the efficiency or the productivity, and targeting the goals which
are beyond capacity etc explained by According to the Cooper, R. (1994)
! It is very important to judge the characteristic of the difference i.e. is it
repetitive or its occurrence is one-time and if it is of repetitive nature, then
there is a need to check them for they will create problem again and again.
! According to the Henry, et al (1989) Generally when the actual performance
is poorer than the planned one, difference is liable to arise and therefore it
becomes the obligation of every staff member to manage the accounts under
his access. An improvement plan has to be imported if there is variance due to
bad performance and thus corrective actions have to be incorporated for the
attainment of desired goals.
! The management should not be accepting to the differences but it should
immediately take such course of action as to rectify it. The difference shows
the difference in profits also and this leads to divergence from the goal of
profit making.
In order to bring the process of profit making on track, it is necessary to find
out the large differences and to cure their reasons so that the budget can be
matched consistently.
! In order to recognize the tendency and continuity of the variances, which are
recovering over time, it is viable to evaluate the year-to-date difference and if
there is any variance which is important as well as negative, it shows that there
is lack of proper management. And if any item differences from positive to
negative from month to month, then it may be due to time element.
! During the planning activity, the individual in charge of a particular cost item
should always be occupied because then that individual will not be able to
raise any deliberations and if he still does so, he can be held responsible for
that by According to the Cooper, R. (1994)
! With the help of regular budgeting process and variance treatment process, the
accuracy can develop and variances can minimize which further increases the
reliability and credibility of the method.
! Considerably constructive as well as the destructive variances should be
Scrutinized.
CONCLUSION
Sometimes when the required or expected costs have not occurred, the variance seems
to be positive which when actually occurs may bring a more prominent negative
difference later on. For instance, the costs were expected for equipment failure, for
delay in production and substitution of the equipment, which did not occur now but
can cost even more expenses later on than the anticipated, If due to the efficiency and
perfection or any other development, any constructive variance takes place then that
variance should be made persistent by determining and repeating its causes. The
prospective budgets should be integrated with persisting advancements. Henry, et al
(1989) , ORIFLAME Assignment Help should follow these strategies to overcome the lost market share.
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