Importance As an organization grows, its customer-base size and locations, product and service offerings, level of technology, distribution channels and number of employees change, duties are divided and spheres of responsibility are created that eventually become centers of responsibility. To cope with such changes, managers must recognize when and how the company's authority structure should be altered to support decision making, communication, and employee motivation. Objectives The objective is to show that it is essential to develop a cost-assigning model amongst cost-incurring areas in order to analyze, evaluate and control an entity's performance more sufficiently, as well as its production and nonproduction departments. Methods The article illustrates a case study of responsibility accounting process using cost accounting tools, and presents a responsibility accounting approach for wineries with different organizational structures. Results The paper presents the peculiar factors underlying cost accounting organization, as well as cost allocation methods in wine-making industry; details a framework of responsibility accounting considering international outlook; outlines production and service departments cost allocation as well as responsibility centers classification with attached numerical codes based on a winery's hierarchy; includes recommendations on how to treat overhead costs assigned to activities as responsibility centers. The developed recommendations may be used to create a system of generating information about costs by business units to improve the accounting model's efficiency employed in wineries. Conclusions and Relevance I conclude that since some produce do not undergo a full production cycle, i.e. cost-incurring areas, an appropriate cost-assigning method is more accurate in reflecting the actual efforts associated with production, which, in turn, ensures product-costing accuracy.
Keywords: responsibility accounting, responsibility center, decision-making, cost base, winery
References:
Alekseeva N.S. Upravlenie zatratami po tsentram otvetstvennosti: organizatsionno-metodicheskie osnovy sozdaniya sistemy upravlenie zatratami [Cost management by responsibility centers: organizational and methodological bases of establishing a system of cost management]. Rossiiskoe predprinimatel'stvo = Russian Journal of Entrepreneurship, 2009, no. 11, iss. 2, pp. 24–28.
Gomonko E.A., Tarasova T.F. Upravlenie zatratami na predpriyatii: uchebnik [Cost management at an enterprise: a manual]. Moscow, KnoRus Publ., 2010, 313 p.
Iva shkevich V.B. Bukhga lterskii upra vlencheskii uchet [Managerial accounting]. Moscow, Magistr, INFRA-M Publ., 2011, 576 p.
Kinney M.R., Raiborn C.A. Cost Accounting: Foundations and Evolutions. South-Western Cengage Learning, 2011, 912 p.
Kondra kov N.P. Bukhga lterskii (fina nsovyi, upra vlencheskii) uchet [Financial and management accounting]. Moscow, Prospekt Publ., 2011, 504 p.
Koteneva E.N., Krasnoslobodtseva G.K., Fil'chakova S.O. Upravlenie zatratami predpriyatiya: ucheb. posobie [Cost management of an enterprise: a manual]. Moscow, Dashkov i K Publ., 2009, 224 p.
Lebedev V.G. Upravlenie zatratami na predpriyatii: ucheb. posobie [Cost management at an enterprise: a manual]. St. Petersburg, Biznes-pressa Publ., 2006, 340 p.
Lee J., Gray B. Kunde Estate Winery: A Case Study in Cost Accounting. CMA Magazine, 1993, vol. 67, iss. 3, pp. 15–19.
Liberman I.A. Upravlenie zatratami: ucheb. posobie dlya studentov vuzov [Cost management: a manual]. Moscow, Rostov-on-Don, MarT Publ., 2006, 618 p.
Mitskevich A.A. Upravlenie zatratami i pribyl'yu [Cost and profit management]. Moscow, Olma-Press, Institute for Economic Strategies Publ., 2003, 191 p.
Podchufarov I. Kompleksnaya sistema upravleniya zatratami: prakticheskie resheniya [An integrated system of cost management: practical solutions]. Upravlenie kompaniei = Managing a company, 2005, no. 11, pp. 60–65.
Savitskaya G.V. Analiz khozyaistvennoi deyatel'nosti predpriyatiya: ucheb. posobie [Analysis of the economic activity of an enterprise: a manual]. Moscow, INFRA-M Publ., 2009, 398 p.
Spoelstra J. Agressivnyi marketing. Kak uvelichit' svoi dokhod, raspravivshis' s zatratami [Marketing Outrageously: How to Increase Your Revenue by Staggering Amounts!]. St. Petersburg, Piter Publ., 2005, 249 p.
Tanasheva O.G., Ryabova T.S. Kontrol' i analiz v sisteme upravleniya zatratami [Monitoring and analysis in the system of cost management]. Ekonomicheskii analiz: teoriya i praktika = Economic analysis: theory and practice, 2004, no. 18, pp. 36–43.
Trubochkina M.I. Upravlenie zatratami predpriyatiya: ucheb. posobie [Cost management of an enterprise: a manual]. Moscow, INFRA-M Publ., 2007, 216 p.
Fomin E.P., Chernousova K.S. Uchetno-informatsionnaya sistema upravlencheskikh raskhodov po tsentram otvetstvennosti [Accounting and information system of management costs by responsibility centers]. Samara, Samara State Economic University Publ., 2010, 171 p.
Khamidullina G.R. Upravlenie zatratami. Planirovanie. Uchet. Kontrol'. Analiz izderzhek obrashcheniya [Cost management. Planning. Accounting. Control. Analysis of distribution costs]. Moscow, Ekzamen Publ., 2004, 350 p.
Horngren C.T., Datar S.М., Rajan M.V. Cost Accounting: A Managerial Emphasis. Prentice Hall, 2012, 892 p.
Chaya V.T., Chupakhina N.I. Perspektivy razvitiya upravlencheskogo ucheta [Prospects for managerial accounting development]. Ekonomicheskii analiz: teoriya i praktika = Economic analysis: theory and practice, 2007, no. 22, pp. 2–14.
