Biggest losers report

The biggest losers report was created to report the worst jobs and the best jobs in the company.  It is generally distributed to the management and those on cost reduction and improvement teams. This report showcases the organization’s providing to the economy and to the public. To create a losers report the company’s system should allow it to run the cost of goods sold report.

The cost of goods sold report or (COGS), is important because it along with the contribution margin gives a snapshot of profitability.  This profit is before the company's administrative costs are added. The cost of goods sold is calculated as beginning inventory + purchases + labor + burden - ending inventory. This report is usually a monthly report and should be available in the computer system.  The company is should show a healthy contribution margin.

The COGS report will be sorted in a way to reveal the top 10 losers and the top 10 best parts. To prepare the report first the COGS report is taken to the excel sheet. The next step is to remove any parts that have low sales and to sort the report by contribution margin amount. The best and worst margins are left out. With the report the reason for the worst margins and the best margins are analyzed by the cost accountant.

The management has to review the report with its team and to solve the problem of worst margin and make them better. The best parts are also reviewed to see if they can be better than they are. The company has to focus its efforts on the parts that generate most revenue.  For the biggest losers report to be proper and provide efficient results the cost of goods sold should be accurate.

Questions

•  What is the biggest losers report?
• How this report is prepared and why is cost of goods sold an important element?