BUS 322 Lecture Notes - Lecture 6: Free Good, Indirect Costs, Financial Statement

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 322
• Professor: Mahmoudian Fereshteh

Document Summary

Support services have been viewed as relatively minor costs compared to costs of productive activity: as the costs have increased, organizations have shifted some of the cost management focus to controlling, reducing, and minimizing costs of support services. Requires to use scarce resources and make complex tradeoffs among competing uses in order to achieve the goals: need reliable quantitative and qualitative cost management information about relative costs and benefits of alternatives. Production departments carry out the goals of an organization by providing goods and services directly to customers: generate revenue. In non-profit organizations or government agencies, certain departments are the source of cash inflow and can be viewed as direct departments. Factors to consider for internal or outsources support services. Are service providers reliable: quality, reliability, and timeliness. Is the function strategic to us: sensitivity of information. Cost allocation is the process of assigning indirect costs to cost objects. Indirect costs common costs of shared facilities or services: cost objects.