The cost systems being used by many companies are faltering when it comes responding to the demand. Systems are normally created to handle one part of production without talking all the needs a company may need as a whole. In the article “One Cost System Isn’t Enough”, author Robert S. Kaplan is analyzing cost systems in order to cover what he believes are three important functions: Inventory valuation for financial and tax statements, operational control, and individual product cost measurement (Kaplan 1998). Kaplan states that cost systems tend to be a little out dated for the competition in today’s business world. He goes further on to give examples on how companies have tried using a cost system for their entire production but with further analyzation we can conclude how doing so misses other costs of productions that are still very necessary for any company. You see, cost systems are meant to deliver accurate and timely information to managers, so they can stimulate operating productivity and measure the costs it takes to make company products. Given that , I completely agree with Kaplan when he says that one cost system is not enough.
Robin Cooper, a professor of management at the Peter F. Drucker Graduate Management School at Claremont Graduate University in Claremont, California stated that truthfully a change to a costing system that is combined and managerially relevant when it comes to set of costing, performance measurement, and operating systems was not possible, either technically or theoretically but he does agree that one system is not enough to cover all the needs a company may need. In the article “When Cost-Effective Design Strategies Aren’t Enough” (2014), Cohen & Iluz state that in order to have better control of operational processes; companies should use several types of cost systems. This is because there is not one system that can touch points on all of the future demand and expenses of a company. An efficient cost system plays a...