Management Accounting in Public Service Decision Making

Chapter7

Costing and cost information for decision making in public services

Introduction

The leading management thinker Peter Drucker is often quoted as saying that “if you can’t measure it then you can’t manage it”. This implies the needs for some form of information and measurement about the activities of an organisation in order to inform the management process and management decision making. By extension, it seems reasonable to also say “if you can’t measure your costs then you can’t manage your costs”. This is the focus of this chapter in relation to public services.

In any organisation, an understanding of the cost structure of the organisation and its activities and the way in which its costs might change in response to internal or ...