Cost Accounting System Research Articles

A Guide to Implementation of Time- Driven Activity -Based Costing in Saudi Electronic University

This research proposes a guide to implementation of time- driven activity -based costing (TDABC) in Saudi Electronic University (SEU) as an alternative to the traditional costing systems. It is worth mentioning that the cost accounting system should support mission and vision of the university by detecting any idle capacity and providing relevant information for rational decision-making as well as improving the quality of services provided to students and finally managing SEU’s resources efficiently and effectively. According to Saudi’s vision 2030, public universities in Saudi Arabia should act on both of revenue side and cost side.
 
 In the current costing system of SEU, there are no cost pools at colleges’ level, at academic departments’ level, at courses’ level, as well as at students’ level. Rather cost pools found at university’ level only. Therefore, the current costing system provides neither information on unit cost per student at any academic program nor information on the unused capacity at any resource centers.
 
 Despite the fact that TDABC theoretically overcomes the criticism to both traditional costing system that uses direct labor or machine hours as a cost driver and the traditional activity- based costing (ABC that uses many transactions cost drivers to allocate overhead costs to cost objects. The implementation of TDABC is still challenging particularly in universities by using the time as the primary cost driver for allocating resource costs to final cost objects in academic programs especially the human labor is considered the main resource in universities.
 
 The proposed guide to implementation TDABC provided SEU’s management information, including but not limited to, the average actual unit cost per student in each academic program either per semester, or per year, comparing actual fees students paid in each academic program to the actual average unit cost in each academic program to determine whether SEU covers all costs. In addition, comparing the average unit cost per student among all academic programs and investigating reasons of variations. The guide helps management determine the unused capacity in each resource center as well as preparing budgets of all resource centers accurately based on the actual used capacity.

Analysis of Restaurants’ Operations Using Time-Driven Activity-based Costing (TDABC): Case Study

ABSTRACT In today’s competitive environment, the analysis of activities is not just about looking at the overall report of profit and loss but more in understanding which of the activities add value and which are identified as wastes. This study examines the implementation of Time-Driven Activity-based Costing (TDABC) to analyze the operations of restaurants and also explores its validity as an approach for mapping the value streams of the operational activities. For this purpose, a case study is planned to reprocess both direct and indirect costs of a restaurant using TDABC. Thus, an observation process is performed to gather the relevant data, besides investigating the case restaurant’s cost accounting system. In this paper, two analytical techniques (TDABC & VSM) are combined to identify both the true costs of the operational activities as well as distinguishing the non-value-added activities. The results have revealed that TDABC appears to be a very feasible approach for both setting the correct cost of operations in restaurants and mapping the source of value-added activities.

Управленческий учет затрат и калькулирование себестоимости продукции обрабатывающих производств в условиях процессно-ориентированного управления

Цель: деятельность экономических субъектов представляет собой реализацию множества взаимосвязанных бизнес-процессов, каждый из которых необходим для полноценного функционирования организации. Выделение бизнес-процессов в отдельные объекты учета затрат позволит сформировать себестоимость ряда осуществляемых мероприятий, имеющих схожие цели и результаты. Существует значительное количество теоретических разработок и практического опыта в отечественной экономической сфере, раскрывающих сущность и значение калькулирования себестоимости отдельных бизнес-процессов, однако недостаточно проработанным остается вопрос формирования информационной базы для осуществления указанных процедур, в связи с чем можно считать актуальным проведение исследования, направленного на разработку счетоводческого сопровождения учета затрат на реализацию отдельных бизнес-процессов экономических субъектов. Обоснование актуальности организации управленческого учета затрат обрабатывающих производств по бизнес-процессам, формирование системы счетоводческого сопровождения учета затрат, калькулирования себестоимости и формирования финансового результата в рамках автономной системы управленческого учета применительно к спе­цифике экономических субъектов, осуществляющих проектирование и производство котлов для центрального и автономного отопления. Обсуждение: в процессе исследования механизма функционирования системы управленческого учета в целом и затратных счетов в частности использовались методы логического, статистического анализа, общенаучные методы познания (анализ, синтез и другие), а также элементы метода бухгалтерского учета: оценка, калькуляция, двойная запись. Результаты: в статье представлена система управленческого учета затрат в процессно-ориентированных структурах, включающая в себя объекты, субъекты, предмет, задачи, инструменты, учетно-аналитическое, функции, результаты. Разработана система счетов управленческого учета затрат на реализацию бизнес-процессов, калькулирование себестоимости и определение финансового результата обрабатывающих производств. Ключевой задачей всех организаций, вне зависимости от объемов, видов деятельности и формы собственности, ставящих своей целью максимизацию получаемой прибыли, является расходование ресурсов, пропорциональное значимости осуществляемых процессов. Проведение мониторинга затратоемкости всех бизнес-процессов, реализуемых в экономическом субъекте, способствует формированию объективного информационного обеспечения принятия эффективных управленческих решений руководством организации.

Preoperative opioid, sedative, and antidepressant use is associated with increased postoperative hospital costs in colorectal surgery.

BackgroundOpioid (OPD), sedative (SDT), and antidepressant (ADM) prescribing has increased dramatically over the last 20 years. This study evaluated preoperative OPD, SDT, and ADM use on hospital costs in patients undergoing colorectal resection at a single institution.MethodsThis study was a retrospective record review. The local ACS-NSQIP database was queried for adult patients (age ≥ 18 years) undergoing open/laparoscopic, partial/total colectomy, or proctectomy from January 1, 2013 to December 31, 2016. Individual patient medical records were reviewed to determine preoperative OPD, SDT, and AD use. Hospital cost data from index admission were captured by the hospital cost accounting system and matched to NSQIP query-identified cases. All ACS-NSQIP categorical patient characteristic, operative risk, and outcome variables were compared in medication groups using chi-square tests or Fisher’s exact tests, and continuous variables were compared using Mann–Whitney U tests.ResultsA total of 1185 colorectal procedures were performed by 30 different surgeons. Of these, 27.6% patients took OPD, 18.5% SDT, and 27.8% ADM preoperatively. Patients taking OPD, SDT, and ADM were found to have increased mean total hospital costs (MTHC) compared to non-users (30.8 vs 23.6 for OPD, 31.6 vs 24.4 for SDT, and 30.7 vs 23.8 for ADM). OPD and SDT use were identified as independent risk factors for increased MTHC on multivariable analysis.ConclusionPreoperative OPD and SDT use can be used to predict increased MTHC in patients undergoing colorectal resections.

Special Features of the Cost Accounting System in Managing Organizations of the Housing and Utilities Sector

Housing and utilities sector (HUS) is a vast nonproduction industry, the purpose of which is to provide the country’s population with a comfortable living environment. Each residential building should be provided with public utilities, and thus should be controlled by certain managing companies. The article deals with the features of the management accounting system in the managing companies of HUS. The methodological basis of the research is the theoretical aspects of management accounting and state regulations. The study was conducted in the managing organizations of the HUS. As a result of the study, a statement for management accounting is proposed which includes certain cost items special for HUS. An algorithm for determining the reimbursements for the house and the surrounding area maintenance is developed. In order to improve the efficiency of management organizations, the author singles out responsibility centers and substantiates the key indicators for them.

Medicare reimbursement of lower extremity bypass does not cover cost of care for most patients with critical limb ischemia

ObjectiveLower extremity bypass surgery remains an important treatment option for patients with critical limb ischemia (CLI), but is resource intensive. We sought to evaluate the cost and Medicare reimbursement for lower extremity bypass surgery in patients with CLI. MethodsHospital cost accounting systems were queried for total technical and professional costs incurred and reimbursement received for patients with CLI undergoing lower extremity bypass at our center between 2011 and 2017. Patients were identified by assignment to Diagnosis-Related Group (DRG) 252, 253, or 254 (other vascular procedure with major complication/comorbidity, with complication/comorbidity, and without complication/comorbidity, respectively). Additional clinical data were incorporated from the Vascular Quality Initiative clinical registry. For non-Medicare patients, reimbursement was indexed to Medicare rates. Contribution margins (reimbursement minus cost) from technical and professional services were analyzed for each patient and summarized by DRG. We compared technical, professional, and total costs; reimbursement; and contribution margins across DRGs using univariate statistics and evaluated factors associated with total contribution margin using median quantile regression. ResultsWe analyzed 68 patients with hemodynamically confirmed CLI (46% rest pain, 54% tissue loss), of whom 25% received a prosthetic graft. Mean age was 66.1 ± 11.6 years, 69% were male, 49% diabetic, 44% current smokers, and 4% on dialysis. In general, total infrainguinal bypass cost was adequately compensated for patients assigned only the most complex DRG 252 (median, $2490; interquartile range [IQR], −$1,621 to $10,080). In the majority of patients with less complex DRG 253 (median, −$3,100; IQR, −$8499 to $109) and DRG 254 (median, −$4902; IQR, −$9259 to $1059), reimbursement did not cover the cost of care. Both technical costs and professional costs varied significantly with the complexity of DRG. Although reimbursement from technical services increased alongside increasing complexity of DRG, there was insignificant variation in professional reimbursement as DRG complexity increased. On multivariable modeling, longer length of stay (−$2547 per additional day) and preoperative dialysis (−$5555) were significantly associated with negative margins. ConclusionsFor the majority of patients with CLI, current Medicare reimbursement does not adequately cover the cost of providing care after open bypass surgery. As commercial insurers move toward Medicare reimbursement rates, more granular risk stratification profiles are needed to ensure open surgical care for patients with CLI remains financially sustainable.

Management accounting as an element of the corporate management system, problems of its organization in economic entities

The article describes the procedure and main problems of organizing management accounting in the general corporate management system of the economic entity, such as: low level of effectiveness of planning (budgeting) mechanism or its absence; little information from the cost accounting system; lack of well-established system for managing the activities of the economic entity as a whole and its separate structural divisions; lack of a mechanism for assessing the profitability of activities, etc.

The Economic Impact of Donor Milk in the Neonatal Intensive Care Unit

To assess the cost-effectiveness of mother's own milk supplemented with donor milkvs mother's own milk supplemented with formula for infants of very low birth weight in the neonatal intensive care unit (NICU). A retrospective analysis of 319 infants with very low birth weight born before (January 2011-December 2012, mother's own milk+formula, n=150) and after (April 2013-March 2015, mother's own milk+donor milk, n=169) a donor milk program was implemented in the NICU. Data were retrieved from a prospectively collected research database, the hospital's electronic medical record, and the hospital's cost accounting system. Costs included feedings and other NICU costs incurred by the hospital. A generalized linear regression model was constructed to evaluate the impact of feeding era on NICU total costs, controlling for neonatal and sociodemographic risk factors and morbidities. An incremental cost-effectiveness ratio was calculated for each morbidity that differed significantly between feeding eras. Infants receiving mother's own milk+donor milk had a lower incidence of necrotizing enterocolitis (NEC) than infants receiving mother's own milk+formula (1.8% vs 6.0%, P=.048). Total (hospital+feeding) median costs (2016 USD) were $169 555 for mother's own milk+donor milk and $185 740 for mother's own milk+formula (P=.331), with median feeding costs of $1317 and $936, respectively (P<.001). Mother's own milk+donor milk was associated with $15 555 lower costs per infant (P=.045) and saved $1812 per percentage point decrease in NEC incidence. The additional cost of a donor milk program was small compared with the cost of a NICU hospitalization. After its introduction, the NEC incidence was significantly lower with small cost savings per case. We speculate that NICUs with greater NEC rates may have greater cost savings.

УДОСКОНАЛЕННЯ УПРАВЛІНСЬКОГО ОБЛІКУ ТА ВНУТРІШНЬОГОСПОДАРСЬКОГО КОНТРОЛЮ У БУДІВНИЦТВІ

Ефективно налагоджений управлінський облік та внутрішньогосподарський контроль у будівництві є базою для прийняття економічно обґрунтованих управлінських рішень. Обґрунтовано організаційно-методичні аспекти будівництва, що впливають на побудову системи обліку та внутрішньогосподарського контролю. Доведено, що для запобігання порушень у будівництві потрібно посилити узгодженість між управлінським обліком і внутрішньогосподарським контролем. Визначено, що ефективно налагоджена система управлінського обліку і внутрішньогосподарського контролю в будівництві дозволить приймати обґрунтовані управлінські рішення.

The Integration between Process Reengineering and Cost-Accounting System Based on Activity &amp; its Contribution to Improve Organisation Performance: Case of Small Industries

This study aims at investigating the contribution of the achievement between Business Process Reengineering method and Activity Based Costing System in ameliorating enterprises through raising its performance. Accordingly, a sample of Small and Medium-sized enterprises located in the industrial area of Setif was studied, through the collection of data from a sample of 32 enterprises, as 76 questionnaires were recovered and the data collected was used in the statistical analysis of the variables.&#x0D; The importance of Business Process Reengineering method was clearly demonstrated in this research in regards to Small and Medium-sized enterprises. Through the contribution of making it closer to the costumer who is more aware of his needs and desires. In addition to that, the results of the research show that the integration between Business Process Reengineering, and Activity Based Costing System ABC contributes in understanding precisely the reasons of costs, behaviour, and the practiced production activities which add value through production steps expressed by operations, which in turn contribute in ameliorating the performance of the enterprise.

Using Throughput Accounting for Cost Management and Performance Assessment: Constraint Theory Approach

The paper aims to use throughput accounting as an approach for developing cost accounting systems in the modern manufacturing environment to evaluate the organization performance. The sample consists of (60) persons in organization for examining the hypotheses. The findings show that information provided by throughput accounting helps in measuring costs and evaluate the efficiency and effectiveness of performance in the organization. This approach supports planning and control processes to maximize throughput and reduce inventory levels. The use of Throughput Accounting under the Theory of Constraints leads to finding solutions to bottlenecks that affect the efficiency and effectiveness of performance.

True Cost of Operating Room Time: Implications for an Orthopaedic Trauma Service

To derive an accurate estimate of the operating cost per minute for an orthopaedic trauma room. Retrospective economic analysis. Level II Trauma Center. Hospital cost-accounting system query. Direct fixed costs, direct variable costs, and hospital overhead. Operating room per minute costs include direct variable costs of $2.77, direct fixed costs of $2.47, and hospital overhead costs of $10.97. Total per minute costs amounted to $16.21. This does not include professional fees of anesthesiology or surgeons or the costs of soft goods or implants. This is the first published study to document the true per minute cost of an orthopaedic trauma operating room. Such information is valuable when defining the value of a dedicated operating room, negotiating employment contracts, defining call stipends, and brokering capital purchases for the orthopaedic trauma service. Economic Level IV. See Instructions for Authors for a complete description of levels of evidence.

Comparing inpatient costs of heart failure admissions for patients with reduced and preserved ejection fraction with or without type 2 diabetes.

We created a retrospective cohort of acutely decompensated HF patients, using linked data from cost accounting systems and electronic medical records. We stratified patients by LVEF into reduced ejection fraction (HFrEF, LVEF ≤40%) and preserved ejection fraction (HFpEF, LVEF >40%) groups and by DM status at admission. Our population had 544 people: 285 HFrEF patients (43.5% with DM) and 259 HFpEF patients (43.6% with DM). Patients with HFrEF and DM had the longest hospital stay (5.10 ± 5.21 days). Patients with HFrEF and DM had the highest hospitalization cost ($11 576 ± 15 818). HFrEF and HFpEF patients with DM had the highest cost, and cost per day alive was highest for HFpEF patients with DM [$3153 (95% CI 2332, 4262)]. Overall cost was higher for patients with DM, whether or not they were admitted with acute HF due to HFrEF or HFpEF. Cost per day alive for patients with DM continued to exceed corresponding costs for patients without DM, with HFpEF patients with DM having the highest cost.

Integration of Activity-Based Costing Modifications and LEAN Accounting into Full Cost Calculation

The purpose of this research is to design a production company fitted full product cost calculation model following analysis of Activity Based Costing (ABC), its modifications and LEAN accounting system principles. The study is based on analysis and comparison in ABC, Time Driven Activity Based Costing (TDABC), Service-Based Costing (S-BC), Duration Based Costing (DBC) and LEAN accounting. The designed innovative full product cost calculation model integrates the following management system elements: LEAN value streams, ABC activities, TDABC time driver, S-BC customer rating, and DBC production duration factor, and has been adapted to a company producing large and complex unique articles. Applicability analysis of the model has involved data systematization, grouping, collection of additional data under the interview method, data interpretation, summarisation, logical conclusion making. Applicability of this model and more efficient control of the pricing decisions at the company, ensuring its greater competitive ability, have been justified by financial calculations. In formation of the full cost calculation model, both the quantitative and qualitative research elements were used: analysis of the modern cost accounting systems was performed; applicability, implications and limitations of the designed model were tested using actual data of the selected industrial company.

INCREASING IMPORTANCE OF USING ACTIVITY BASED COSTING FOR DETERMINING MARKETING COSTS

Today, in order to have competitive strength, fırms have to make better decisions about production technologies, product groups, pricing, advertising and distribution strategies. In order to make better decisions, they need correct cost information. Because of developing and chaııging production technologies, direct material and direct labor are no longer the most important production factors, instead, the percentage of manufacturing overhead costs in the total cost structure has increased. Traditional cost accounting systems are insuffıcient to provide accurate cost information and Activity Based Costing (ABC) is suggested by ntaıty academicians and accountants as a better cost accounting system. Additionally, high competition increased the marketing activities and consequently the marketing costs of the companies. In this study, first, ABC and marketing costs are examined, and then in order to have accurate cost information and to develop better strategies in every business area, the importance of using ABC for allocating marketing costs to cost objects is stressed.

УПРАВЛЕНЧЕСКИЙ УЧЕТ В СИСТЕМЕ УПРАВЛЕНИЯ МЕДИЦИНСКОЙ ОРГАНИЗАЦИЕЙ

The emergence and growth of the number of market-oriented organizations led to the introduction of management accounting into economic life. A well-established system of management accounting and reporting for managers of different levels is necessary for the highly effective work of a modern medical organization. At the same time, innovative approaches to management, the emergence of new forms of economic relationships, the constantly growing information needs of managers of the organization, the increase in the level of socialization and intellectualization of society have led to the emergence of new accounting objects. The allocation of management accounting in the system of economic accounting, along with accounting, statistical, operational and tax, is fixed at the legislative level. However, the organization determines the formation of this type of accounting to meet the information needs of management independently, which is also stipulated by law. The theoretical and methodological aspects of management accounting have been studied by many foreign and domestic scientists, but today the potential of accounting in the field of management of health care institutions, the essence of its system methodology, without understanding which the full use of its tools is complicated. There are no studies that would comprehensively cover the problems of management accounting in medical organizations in this area, which has determined the relevance and timeliness of this work. The article is devoted to the organization and management of accounting in medical organizations. The article substantiates the need to implement management accounting in the management system of a medical organization. The introduction of management accounting is considered as one of the factors for improving the efficiency of the medical organization’s management system. The article considers the classification of management accounting tools, outlines its range of tasks, taking into account the specifics of the medical organization, describes the conditions for effective management accounting in medical organizations, the problems of implementing and functioning of management accounting, the main approaches to the formation of the concept of modern management accounting for medical organizations. A management accounting system can be effective in healthcare institutions if it takes into account current trends in the industry and the economy as a whole. In the modern understanding of the term «management accounting», more and more emphasis is placed on the word «management», since the organization and methodology of this type of accounting is aimed at solving management tasks. The emergence and existence of management accounting is due to a specific goal-to help internal users make more informed decisions and is aimed at generating information for internal users to make management decisions. However, it is not regulated by generally accepted principles and is organized by the company independently. However, traditional approaches to the concept that the accounting system should include only internal information, and activities are considered as one main item of expenditure of the organization, are currently unacceptable. The system of domestic accounting should be focused not only on the production of services, but also on the market. At the same time, service-oriented thinking should change to patient-oriented thinking. Management accounting plays an important role in solving predictive tasks. The organization of management accounting in the healthcare industry provides for the need to take into account a number of factors that have a primary impact and are determined by the specifics of the activity. Each medical organization develops a management accounting system based on its own needs and work specifics. The cost of developing and further operating a management accounting system should not exceed the economic benefit of its implementation. The main approaches to forming the concept of modern management accounting for medical organizations are the introduction of new cost accounting systems and new approaches to calculating the cost of medical services provided. The experience of many medical organizations shows that the practical application of management accounting, unfortunately, has not yet received proper distribution, due to an unsolved range of problems. In modern conditions, this issue is extremely relevant and requires research.

Financial Implications for the Treatment of Medicare Patients With Isolated Intertrochanteric Femur Fractures: Disproportionate Losses Among Healthier Patients.

Introduction:With an aging American public, the rising incidence of geriatric hip fractures provides a significant impact on the financial sustainability for hospitals. To date, there is little research comparing reimbursement to hospital costs for geriatric hip fracture treatment. The purpose of this study is to compare hospital costs to reimbursement for patients treated surgically with an isolated intertrochanteric femur fracture, insured by the Center of Medicare and Medicaid Services (CMS).Materials and Methods:A retrospective review at an urban, academic, level 1 trauma center was conducted for 287 CMS-insured intertrochanteric femur fracture patients between 2013 and 2017. The total cost of care was determined using our hospital’s cost accounting system. The total reimbursement was determined from the CMS inpatient prospective payment system, based upon the Medical-Severity Diagnosis-Related Grouping (MS-DRG).Results:In this patient population, the average CMS reimbursement was US$19 049 ± 7221 and the average cost of care was US$19 822 ± 8078. This yielded a net deficit of US$773/patient and US$220 417 in total. The average reimbursement and cost for the less comorbid patients (MS-DRG weight < 2.5, n = 215) was US$16 198 ± 3983 and US$17 764 ± 5628, respectively, yielding an average net deficit of US$1566/patient. For the more comorbid patients (MS-DRG weight > 2.5, n = 72) the mean reimbursement and cost were US$27 796 ± 3944 and US$26 180 ± 10 880, respectively, yielding an average net profit of US$1616/patient.Discussion:There are disproportionate average losses in healthier patients undergoing surgical treatment of intertrochanteric femur fractures at our institution. A deficit in less comorbid patients indicates a discontinuity of inpatient health-care costs with MS-DRG-weighted reimbursement in the setting of geriatric intertrochanteric femur fractures.Conclusions:To maintain hospitals’ financial sustainability and health-care accessibility; costing and reimbursement models need adjusting to properly compensate the treatment of geriatric intertrochanteric femur fractures.Level of Evidence:Diagnostic level IV.

Sistemi obračuna troškova u poslovnim bankama - tradicionalni sistem i sistem obračuna zasnovan na aktivnostima

Increasing competition between banks in local and global markets imposed the need for the bank to determine the most competitive prices and markets for its products, which ensures profit maximization while minimizing risk, as well as maintaining optimal product quality. The ability of management to make the right decisions at the right time, largely depends on the adequacy of cost systems that provide a high degree of accuracy in costing, and timely receipt of complete information on each individual banking product. The paper presents a comparative overview of the traditional cost accounting system and the ABC cost accounting system, in order to find the most efficient cost system and to reach the best business results by banks.

Time-Driven Activity-Based Costing in the Assembly Industry

Costs and their determination play a critical role in all manufacturing companies. The traditional costing system has received criticism resulting from the arbitrary allocation of indirect manufacturing costs. As an important initiative to address its weaknesses, new costing methods such as the Time-Driven Activity-Based Costing (TDABC) have emerged. Unfortunately, up to our knowledge, no investigations have been applied in analyzing assembly companies thoroughly nor considering all the processes necessary to obtain the final products. This article explores the TDABC application in the assembly industry through comparison with traditional volume-based costing by focusing on manual and semi-automatized production. Since the research is descriptive, a multiple-case study design was implemented in the assembly of televisions, motorcycles, and printed circuit boards. The developed methodology allowed determining the existence of factory overhead and direct labor cost variances between two different cost accounting systems, which also affected the unit cost of the products. Findings also highlight the benefits of TDABC application in the assembly industry, along with the shortcomings and future potential of research in this area.

Faktori efikasnosti upravljanja troškovima preduzeća u Srbji

Increased complexity of business operations, fast market and technological changes and global competition demand a quick and adequate answer from enterprises' management structures. Reliable and efficient cost accounting system provides a secure basis for making not only short-term, but strategic managements' decisions, as well. Assumptions for an increase of cost management efficiency are better interconnection between financial and management accounting, better control of cost types and cost centers, more reliable information for an alternative business decision making, support to investments control and strategic planning, impact on the motivation of employees and other. Seizing and keeping of enterprise's competitive position is no longer possible without active cost management policy. Research in this paper has shown that enterprises from Serbia's economic sector can significantly improve its business performance and competitiveness through advancement of cost accounting system.