A METHODOLOGY FOR IMPLEMENTING A CURRENT COST MANAGEMENT SYSTEM AT PROCESSING COMPANIES OF THE DISTILLING INDUSTRY: THE CASE OF THE MARIINSK DISTILLING PLANT

Abstract

Methods of controlling current costs in the processing industry are discussed. A description is given of cost and profit management techniques based on the concept of financial responsibility centers. An algorithm is provided to consistently develop financial responsibility centers, determine the scope of their competence, and thus achieve an effective functioning of the system. A method is described which is based on direct costing and is used to determine the financial safety margin of a processing company. The implementation of advanced direct costing in the context of financial responsibility centers allows one to analyze the structure of fixed and variable costs, marginal income, and profits for the whole company and, thus, improve the cost management and financial performance.

Keywords

• current cost management
• financial responsibility centers
• direct costing