Direct Cost Case Study

The following essay discuss how cost of producing a product is allocated between direct and indirect cost. One type of direct cost will be identified and examine to how it will reduce cost for WGCN and the consequence of cutting this cost, but maintaining profit and quality. Additionally a flowchart will be use to explain how process work within the laundry department, and later on in the essay Hoskins and Macve (1990) will be summarised and use to explain how it help us “understand modern management”. Finally administrative coordination will be use to examine the structure and process of “management via accounting” in relation to WGCN.
“Direct cost is cost related to the particular cost object that can be traced to the cost object(work in …show more content…
I will do this by reducing the amount of detergent used per wash. However this may lead to degrading quality on hygiene even though it reduces the direct cost, and if it does not meet standard for hygiene clothes need to be rewash. Consequently this would mean the process has become inefficient and would incur more direct cost as well as indirect cost. On the other hand this reduces the amount of waste water produce therefore reduce tax but this would have a significant impact on the reduction of direct cost because generally this would contribute to around 50% of the operating cost. (Alliance and water, no date)Therefore with this extra money they can hire or raise money for workers, hence this could reduce the labour shortage problem. Moreover if they have additional money to spare they can provide training for workers so they become more efficient in the laundry process. Also they can increase the number of maintenance and cleaning per day on the equipment to maintain high efficiency throughout the working hours. Additionally they can install an diaphragm pump which is used to pump chemical into the continuous tunnel washer, but compare to normal pumps it has a longer lifespan as well as more effective rate of pumping chemical which can reduce direct cost further and it does not require a lot of maintenance(Brightwell,2015). However even though there is a lot of method to correct the …show more content…
This is where the two basic factor of managerialism grammatocentrism and calculability was first discovered. Grammatocentrism is turning situation into written form and calculability represent constant numerically based examination. This was further develop by two graduate from the academy, their name was Daniel Tyler and George whistler which further developed the theory but there was three major problems. Firstly Tyler and whistler was not successful officer, secondly they follow the army academy model hence there was no major breakthrough and lastly the effectiveness because of the genuine accountability is not very effective. Furthermore In Hoskin and Macve(1990) article management is split into two form, a form of power and cultural managerialism which is disciplinary power. Disciplinary power to run people and organization by implementing effective disciplinary system reinforced with internal control , and power which constantly evolves organizational system by gathering latest form of expert knowledge, for example hiring graduate from university. Furthermore Hoskin and Macve(1990) suggested that disciplinary power comes from feedback of expert knowledge, and in return increase the incentive for people to become expert in a field hence ensure