Introduction and Practice of Direct Cost Accounting in Long-established Company

―Management by Sectoral Profit―

Abstract

　The purposes of direct costing are (1) not only management achieve the company’s target profit, but also they has the responsibility for decreasing fixed cost, (2) management get lower management and employee to recognize the responsibility for decreasing variable cost.

　This article is theoretical and case research that one of long-established SMEs in Kagoshima prefecture has the management system in order to achieve target profit and the management philosophy. Company F in this article is using direct costing as management accounting system in order to achieve the target profit and keep the company going. The points of this case are (1) CEO of company F makes the adaptive system to for target profit and philosophy, and (2) the accountants cooperate to make the management system with CEO.