text: Accounting Support and Cost Management
  Figure 5-2. Cost management process
  5-47. Implementing the cost management process will accrue numerous benefits to leaders and their units.
  The process makes it easier for commanders to:
  * Understand both near and long-term cost implications of their decisions.
  * Make effective trade-off decisions to achieve optimal use of limited resources.
  * Hold subordinates accountable for improving the efficiency and effectiveness of their operations.
  5-48. Financial managers continually monitor the execution of each component of the cost management
  process and adjust the process as needed based on new information from either internal or external sources.
  Each component is described in more detail in the following paragraphs.
  COST PLANNING
  5-49. Cost planning is the use of a cost model for “should-cost” forecasting to make informed decisions.
  Should-cost represents an estimate of the resources required to produce a measured outcome (product or
  service) to a specified standard. The approximate cost relies on identified cost drivers, standard rates, and
  historical trends, and can reflect other variables (e.g., inefficiencies or economies of scale). There are
  several methodologies for developing a should-cost estimate, to include engineered estimates, parametric
  estimates, and estimates produced by analogy. Financial managers incorporate cost planning when
  preparing budget requirements requests, developing cost estimates, determining output quantities and their
  associated costs, managing capacity, and conducting risk analysis. Cost planning occurs over various
  periods from monthly projections to the current and out years. The time frame applied depends on the
  planning requirements of the organization. Successful cost planning depends on the use of reliable and
  consistent standard rates embedded in cost models to predict future costs based on a set level of output or
  activity. Financial managers rely on standard rates embedded in their cost models to estimate and project
  costs to assist commanders in making informed operational and cost decisions. Standard rates provide a