A Theoretical Model For Accounting For Cost Variance In The Residential Home Building Industry

Abstract

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="font-size: 10pt; mso-fareast-font-family: Calibri;"><span style="font-family: Times New Roman;">The purpose of this study was to propose a theoretical model for home building contractors.<span style="mso-spacerun: yes;"> </span>The theoretical framework proposed was formulated from a systems approach focusing on the principles of general systems theory and applying the theory of single-loop learning to the task of a real-time cost variance calculation.<span style="mso-spacerun: yes;"> </span>In creating the model, the researcher first looked at the concept of general systems theory, applying the system concept using a systems approach.<span style="mso-spacerun: yes;"> </span>This approach has led to the development of the theoretical model for the home building industry.<span style="mso-spacerun: yes;"> </span>In the center of the model is the cost variance system interacting with the individual subsystems; estimating, accounting, standards, and technology.<span style="mso-spacerun: yes;"> </span>This model outlines the importance of four separate subsystems and their interrelationships in the calculation of cost variance.<span style="mso-spacerun: yes;"> </span>The model in this study has led to several important implications and recommendations for the home building industry</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>