The Goal
I'm aware that I am a little late to the party. For those who don't know, The Goal was is an business novel, published in 1984. The Goal is relatively short and easy reading, which makes it pretty accessible. You will be able to pick up the concepts and themes without a strong cost accounting background.
The Goal follows Alex, a plant manager whose plant is in trouble. He meets with an old college tutor who guides him through saving his plant and marriage. The book outlines Goldratt's Theory of Constraints (TOC), which is covered very briefly in the CIMA accounting qualification. The idea behind TOC is that you identify the goal of the organisation (to make money), then align all the processes around doing that. Which seems pretty obvious.
I first read The Goal in 2012, as I was about to start a job in a manufacturing organisation. My new boss recommended I read it to get a little background to the challenges with cost accounting. I enjoyed it at the time and have just finished re-reading it, and it has raised a whole bunch of questions for me.
The thing that really struggled with was Goldratt's critique of cost accounting. There is a scene where two characters are talking about stock, they both agree that stock is a liability, but it appears on the balance sheet as an asset. I had to think a lot about that to understand it.
In non-manufacturing organisations the stock value is creating by debiting stock and crediting cash. You literally spend money to have stock to sell. It is really important not to have too much stock as it can easily swallow cash. In manufacturing organisations the book-keeping is debit stock, credit profit and loss. The credit to profit and loss is known as transfers to inventory. The transfers to inventory happen at standard cost, which is a budget cost of producing whatever the product is.
Goldratt's argument against cost accounting disputes what should be included in the standard cost versus what is a period cost to be borne by the organisation. He states that only the material cost should be included. Typically, cost accounting includes overheads, labour, depreciation, and a lot else. I am inclined to agree with Goldratt, but I think that the accounting standards say otherwise.
I would highly recommend reading The Goal. It gives a good insight into cost accounting and running an organisation, and doesn't seem too dated, given that it is not far off 40 years old. I think that a lot of the problems that are discussed and characters encountered are still around now.