How should this be answered?

Carmen Toys, Inc. (CTI) manufactures a variety of electronic toys for children aged 3 to 14 years. The company started as a Ma & Pa basement operation, and grew steadily over the last nine years. It now employs over 100 people and has sales revenue of over P250 million. Katie Brigg, the CEO of CTI also recognizes that competition has increased during this period; therefore future growth will not be easy. Brigg decided to hire a professional cost management expert to keep track of the company's costs. She hired Molly Crosby and called her office to have a serious conversation about accounting and costing, in particular.

Brigg: Molly, I would like you to pay particular attention to developing an official costing system.

Currently, we don't have one. I believe this should be your first priority because competition is

rising and if we do not understand our costs, we might start losing to our rivals.

Crosby: I understand your point very well, Ms. Brigg.

Brigg: Call me Katie.

Crosby: Very well, Katie. I have a few ideas that I picked up from my CMA courses that I think are worth implementing. However, it looks like we need to start with the basics.

What are the

Resources and costs

Supply of resources vs. the use of resources

Classification of costs

Alternative costing systems