Accounting Best Practices, Fifth Edition

Implementation Issues for Costing Best Practices

This section covers the general level of implementation cost and duration for each of the best practices discussed later in this chapter. Each best practice is noted in Exhibit 9.1, along with a rating of the cost and duration of implementation for each one. Generally speaking, these are easy best practices to install because most of them can be completed with no other approval than the controller’s, and they have a short implementation duration and are quite inexpensive to install and operate. The main exceptions are target costing and activity-based costing, which require a major commitment of time and staff and the approval of other department managers, depending on their levels of involvement in the implementations. However, despite the level of installation difficulty for these two best practices, they both have the most significant positive impact of all the improvements noted in this chapter and thus are well worth the effort.

Exhibit 9.1. Summary of Costing Best Practices

	Best Practice	Cost	Install Time
9–1	Audit bills of material
9–2	Audit labor routings
9–3	Eliminate high-leverage overhead allocation bases
9–4	Assign ...