Page 203 - DCOM206_COST_ACCOUNTING_II

Cost Accounting – II

Notes There are three levels of management and the reports can be classified according to the needs as
follows:
1. Top-Level Management Reports

2. Middle Level Management Reports
3. Lower Level Management Reports
Each of these reports is discussed in detail below:
1. Top Management Reports: At this level reports are concerned with the following matters:

 For determining the aims of the enterprise;
 For formulation of policies and plans;
 For delegation of responsibility in successful manner to executives for the best
utilisation of resources; and
 For formulating special significant plans.
It can be assumed that top brass of the business only needs reports for cost and operational
control. The report submitted to the level should be brief or we can call it a summarised
statement, which provides an overall view on the subject. Previously these reports used to
be submitted within the time framework. The time framework may be monthly, quarterly
or yearly. With the use of information technology and the real time accounting, the whole
time framework has been changed and now these can be made available online.
Reports to top level management consist of the following:
(a) Reports to the Board of Directors
(b) Reports to the Chief Finance Officer

(c) Reports to the Chief Production officer, and
(d) Reports to the Chief Executive Marketing and Sales.
Let us study these reports in brief.
(a) Reports to the Board of Directors: Generally, following reports are to be submitted to
the Board of Directors and the Chief Executive Officer (C.E.O.):
(i) Different budgets
(ii) Machine utilisation statement

(iii) Work force utilisation statement
(iv) Cost analysis statement
(v) Fund flow statement
(vi) Cash flow statement, and

(vii) Balance sheet and income statement
(b) Reports to the Chief Finance Officer: Following reports are to be submitted to the Chief
Finance Officer (C.F.O.):

(i) Cash flow statement,
(ii) Funds flow statement,
(iii) Abstract of receipts and payments and

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