Cost Management and Activity-Based Costing Essay

Cost Management and Activity-Based Costing - Essay ExampleThis subject is built upon the cutting most of the things and leaving only those which are absolutely necessary for the company like firing of both secretaries, the firing of genius secretary, one social worker for Community Mental Health Services and one Social Worker for Outpatient mental health treatment, cutting in half the purchased serve of security and consultation and the replacement of an assistant on lower pay rate.Reducing reckons are a very difficult job for the administration. Whosever share gets cut, that psyche becomes unhappy which may lead to future disagreements or problems. For this reason the management has to sort out the budget cuts from appropriate angles and has to deal with the problems straight on. The budgets cuts that can be strike downd in this budget are prioritized below one by one.As mentioned before, budgets must be properly handled when there is a need to reduce them or great problems ca n occur. The first step to reduce the budget is to review the program and management achievements and fiscal performance over the year. This includes reviewing the objectives achieved, comparing budget to actual figures, and looking at the number of people served in each program. Based on this review, new goals and objectives should be discussed and agreed upon in a prelim way. These goals must be realistic in nature sticking to the fact that the budget will be reduced and the targets would be harder to achieve.To reduce expenses, it is helpful to get what each program would cost at different service levels. A fixed percent cut across all expense lines is often non the most effective way to reduce expenses. For instance, do not assume that benefits and costs move together, with each additive dollar spent resulting in an additional dollar of results. The costs to reduce must be properly analyzed first and then the reduction must be implemented. The estimate of the costs take in achieving the objectives,