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Each report delivered to a manager should be constructed according to the usefulness to the manager of information provided by the accounting system. The actual costs can be compared with the budgeted figures, standard-cost variances can be shown, and unit-cost calculations can be made. Any presentation of the information that promotes for sound decision making is suitable. The classification of costs as controllable or uncontrollable can be difficult. One of the most troublesome problems is obtaining the agreement and cooperation of the foremen, supervisors, and managers who will be assigned certain responsibilities. It is important to make certain that the reports will be used for making decisions and directing activities. To this end, the supervisory employees involved should take part in planning the reporting system. Preparation of format and content of responsibility reports can serve to involve all the managers in the communication-information system, and the whole process can help bring managers together into a smooth-working team.

'determine the file name FileName = . . . . . Open FileName For Binary As #1 FileLength = LOF(1) ReDim FileByte(FileLength) 'read the file For Count = 1 To FileLength Get #1, , FileByte(Count) Next Count 'process the file contents 'write to the file For Count = 1 To FileLength Put #1, Count, FileByte(Count) Next Count Close #1 End Sub

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The responsibility-center accounting scheme is just one way to organize cost and profit data for analyzing the results of operations. For a firm that produces and sells more than one product in more than one geographical area to customers that have a variety of characteristics, many other possible types of analysis are available. Several are listed next: Product lines. Analysis by product lines can show which products are most profitable. It can point up the need for costsaving programs or identify products for maximum sales promotion. Special orders. The results of the production of special orders should always be analyzed to determine whether producing to custom-design specifications is really profitable. Such analyses could lead to special pricing formulas, better costestimating procedures, and more efficient use of labor and equipment. Sales analysis. The costs of selling products can be analyzed according to various customer characteristics, taking into account the cost of various selling efforts, as follows:

450 400 350 300 250 200 150 100 50 0

Customer groups. Sales costs and profits can be classified by customer groups. This is especially valuable when a few customers account for a large part of the sales. Industry. Analysis of sales, costs, and profits of sales to certain industries may be useful in planning efforts to sell to growing industries. Geographical areas. The cost of shipping goods to faraway customers may consume a large part of the gross or contribution margin. Analysis by areas can help the sales manager assign salespeople where they can obtain the most profitable results. Order size. Quantity discounts must be watched. Also, classification of sales, costs, and profits by order size may bring out opportunities for new selling categories. Distribution channels. Classification of sales by distribution channels wholesalers, retailers, and retail customers may open up profit opportunities and areas for further investigation. Combinations. Combinations of the analyses outlined in items a, b, c, d, and e may give useful information. For example, sales, costs, and profits classified by both order size and geographical area might lead to the development of a new selling strategy. These costs and profitability analyses could absorb a great deal of clerical time and perhaps cost more than they would be worth. Management of each firm must decide for itself which ones are worthwhile for its operation. Electronic data processing can play an important part. With proper programming, coding, and processing of the data, a manufacturer can have a vast amount of information and have it more promptly than by manual processing. The task is then that of using the information to plan production and sales strategies.

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