Cost systems and their impact on the profitability of small and medium enterprises in the textile sector in latin america

Abstract

The purpose of this article is to determine the impact that the cost system has on the profitability of medium and small companies in the textile sector in Latin America, globalization and industrial expansion has generated that companies in the textile sector are constantly updating, since that this sector must be at the forefront of the tastes of its potential clients. Textile companies often do not have the ideal cost system for their needs, so the costs mostly do not provide the correct information for decision making or for determining their profitability, which is why it is It is important to implement a cost system and not only implement it but also use the one that adapts to the specific needs of the company. The proper implementation of the system in question will allow for cost control, allowing for obtaining real and suitable information for decision making. financial in favor of improving business profitability, this research is documentary type so to develop the purpose a bibliographic search of books, magazines and past research was carried out. It was concluded that the correct use or correct implementation of the cost system generates that the entity can have greater control since this system allows identifying in which production line the failure or waste of raw materials is located, so the Textile companies that implement the cost system and use it correctly will allow an improvement in both production and financial aspects of the entity.