AFM481 Chapter Notes -Cost Accounting, Strategic Management, List Of Fables Characters

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM481
• Professor: Grant Russell

Document Summary

Use info for decision-making (need to know what caused the variance too!) Diagnostic control system mgmt. to monitor variances and determine if operations are going as planned; decide what to do to bring operations back under control (if needed) Only use variable that are key to success. Decide if the variance is large enough or consistent enough to justify investigation. Important if the variance is larger than the threshold (absolute amount of %) Consistent trend in variances investigate what the causes are so that they can be managed. Use reasons for variances to draw conclusions and determine what action to take. Or error in accounting records i. e. the variance is not actually a variance. Identify categories to separate variances to produce more useful information. Motivate managers & employees by using variances as a basis for evaluation. The cost managers expect to incur to produces goods/services as planned.