The Importance of Information Management System Design for Cost Accounting in Production Companies

Abstract

Estimating product cost close to their real values is very important for companies in order to know product profits and be competitive in the market. Cost estimation becomes harder for a production company, especially if it produces for order or has a wide rage product variety. In addition to these, if the company has tough production conditions, it becomes harder to obtain healthy information that comes from production processes and the estimated product costs might be very different than its real value. For some products, after the completion of production and distribution, it might be lately understood that although profit was expected by the estimated cost, loss happens since the realized cost is more than the price. To overcome all these obstacles and to make an accurate cost estimation, information management system should be designed according to cost accounting system which should be kept healthy and up to date. In this paper, based on the experiences on Activity Based Costing Method applications in foundaries, which are among the companies with hardest production conditions, the design of Information Management System with respect to accounting system is explained.