Reports proposal for cost management in a small shoes factory in São Paulo city

Abstract

The micro and small businesses emerge from enterpreneurs who seek personal and professional satisfaction. Because of that, such enterprises are regarded with a strong personal component in their management. In many situations, these people are unaware of practical and theoretical management knowledge, including costs, which are useful for an effective decision making process. The aim of this research was to create a set of reports for the cost management, and such reports are to optimize the outcome of a small shoe business in Sao Paulo city. In relation to the cost methods, the literature revision revealed obstacles concerning the use of the absorption cost for management purposes. The variable cost was appointed as the most appropriate for small businesses as it allows the distinction between variable and fixed costs, between the best understanding of the nature and the behavior of the costs concerning the amount of production and sales as well as the contribution margin examination. This work can be regarded as an action-research, and it allowed the obtaining of the elements that subsidized the designing of the proposed reports.