Despite vast changes in business and technology over the past 50 years, the managerial costing practices used by most companies today have failed to evolve. Cost information used to support critical management decisions continues to be based on minimalist cost models deemed acceptable for financial accounting—cost models that fail to consider the complexities of operating in today’s environment.  

The focus of this Statement on Management Accounting (SMA) is on cost modeling, which is foundational to having a managerial costing system that effectively supports an organization’s decision-making needs. Building on the IMA® Conceptual Framework for Managerial Costing (CFMC), it  describes a six-step methodology that organizations can use to develop a costing model appropriate for their specific needs. Each step is explained in detail and illustrative case examples are provided.

 

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About the Authors

Raef Lawson , Ph.D., CMA, CSCA, CPA, CFA, CAE
Raef Lawson, Ph.D., CMA, CSCA, CPA, CFA, CAE, is the Chair of IMA’s Research Foundation and former professor-in-residence and vice president of research and policy at IMA. You can reach him at raeflawson@outlook.com.
Gary Cokins , CPIM
Gary Cokins, CPIM, is the founder and owner of the consulting firm Analytics-Based Performance Management LLC in Cary, N.C. He is also a member of IMA and served as IMA’s executive-in-residence from 2015 to 2018. You can reach Gary at (919) 720-2718 or gcokins@garycokins.com.
Douglas T. Hicks , CPA
Douglas T. Hicks, CPA, is president of D. T. Hicks & Co., a consulting firm concentrating on the decision-costing needs of small and midsized organizations. He can be reached at dohicks@aol.com.
Kip Krumwiede , Ph.D., CMA, CSCA, CPA
Kip Krumwiede, Ph.D., CMA, CSCA, CPA, is the director of research at IMA. You can reach him at kkrumwiede@imanet.org.
Monte R. Swain , Ph.D., CMA, CPA, CGMA
Monte R. Swain, Ph.D., CMA, CPA, CGMA, is the Deloitte Professor of Accountancy at Brigham Young University. He’s also a member of IMA’s Salt Lake Area Chapter. Monte can be reached at monte@byu.edu.
Larry R. White , CMA, CSCA, CFM, CPA, CGFM
Larry R. White, CMA, CSCA, CFM, Former IMA Global Chair, IMA’s COSO Board Member. He can be reached at lrwhitecma@hotmail.com.
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