What are the difficulties in cost reduction, Managerial Accounting

Assignment Help:

Difficulties in cost reduction

1) Resistance by employees to pressure to reduce cost usually because the nature and purpose of the campaign has not been properly explained to them and they feel threatened by the change

2) They may be confined to a small area the business 9e.g to one department) with the result that cost are reduced in one cost centre only to reappear as an extra cost in another cost centre;

3) Efforts to cut material and labor cost may erode confidence in established system for estimating material usage and labor productivity standards;

4) Cost reduction campaigns are often introduced as a rushed desperate measure instead of a carefully organized exercise.

 


Related Discussions:- What are the difficulties in cost reduction

Transfer pricing-performance evaluation, Transfer Pricing and Performance E...

Transfer Pricing and Performance Evaluation Transfer pricing is simple in concept and yet complex in implementation. It provides a divisional output valuation where output from

Absorption cost-variable cost-transfer pricing methods, Absorption cost ...

Absorption cost Absorption, or full cost systems, transfer the full cost of the supplying department to the receiving department. Where a profit is to be allowed to the supplyi

Significance points of variance, Significance points of Variance The fo...

Significance points of Variance The following significant points must be kept in mind: Controllability:   Controllability should also influence the decision whether t

Calculate the direct materials costs, XYZ Industries manufactures electroni...

XYZ Industries manufactures electronic testing equipment. XYZ also installs the equipment at customers' sites and ensures that it functions smoothly. Additional information on the

Debentures, 500 000 debentures are in a company at a coupon value of R50 ea...

500 000 debentures are in a company at a coupon value of R50 each in issue. During each financial year, interest on these debentures is paid in arrears and in equal quarterly inst

Transfer pricing , Western States Supply, Inc. (WSS), consists of three div...

Western States Supply, Inc. (WSS), consists of three divisions—California, Northwest, and Southwest—that operate as if they were independent companies. Each division has its own sa

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd