Use Of Cost Information Research Articles

The Use of Cost Information When Defining Critical Values for Prediction of Rare Events by using Logistic Regression and Similar Methods

The Use of Cost Information When Defining Critical Values for Prediction of Rare Events by using Logistic Regression and Similar Methods

Cost‐system functionality and the performance of the Malaysian palm oil industry

PurposeThe purpose of this paper is to investigate the relationship between cost‐system functionality and the performance of oil‐palm enterprises in Malaysia, as well as whether manager's perceived usefulness of cost information mediates the cost‐system functionality‐performance relationship.Design/methodology/approachA structured questionnaire is used to gather data from oil‐palm enterprises located in Sarawak.FindingsThe results indicate that the cost relevance/timeliness dimension of cost‐system functionality significantly enhances the performance of oil‐palm enterprises. However, manager's perceived usefulness of cost information only partially mediates the cost‐system functionality‐non‐financial performance relationship, and this is possibly due to the nature of control over the estate operations by the head office.Research limitations/implicationsOwing to the small‐sample size and because the oil‐palm enterprises are located only in Sarawak, the generalisability of the results may be limited. Besides, the findings are based on the estate setting whereby decisions made are relatively structured and therefore, they may not apply in less‐structured decision‐making settings.Originality/valuePast findings on the causal link between cost‐system functionality and performance are mixed. However, high‐functional cost systems are expected to be more cost beneficial when environment is highly uncertain. The palm oil industry operates in a highly turbulent economic environment due to serious external challenges and it is expected to benefit from high‐functional cost systems. Unlike previous studies based on firms from diverse industries, the operational homogeneity of the oil‐palm enterprises in this paper enables the effects of cost‐system functionality on performance to be examined in a more controlled setting. By analyzing the attributes of cost‐system functionality into two major dimensions, this paper shows that performance could be enhanced only through provision of relevant and timely cost information.

Informações de custos: um estudo em empresas hoteleiras na cidade de Florianópolis - SC

The increasing competitiveness is taking hotels to best adjust its management systems mainly those related to costs. The subject of this work is developed in this sense: to present research results obtained from the use of cost information in hotel companies in Florianópolis (SC) city. Thus, the research verifies how hotel companies understand and use their cost information to explore advantages and minimize threats resulting from environmental changes. This way, one brief revision is undertaken on the main concepts related to costing methods, analysis cost/volume/profit, responsibility center management and daily rate formation. To develop this research and achieve the main objective, a descriptive method was used throuch a survey and delineation by accessibility. The results reveal that 40% of hotels use some kind of costing system.

Costing Information in the UK NHS: The (Non-) Use of Cost Information in the UK NHS Trust Hospitals

This paper aims to examine empirically the development and usage of cost information in the UK National Health Services (NHS) in order to provide information on how it is currently used and how it might be used in the future. The issues of costing healthcare service have been discussed internationally, in the light of the Diagnostic Related Groups (DRGs). The findings suggests that, in the UK, despite the introduction of Health Resource Groups (HRGs), there is no indication that the Department of Health has any direct interest in pursuing the consideration of HRGs as a control device. Therefore, the micro effect is a decoupling from cost control at the organisational level. The paper adds to our understanding of the nature of the interaction between the macro steering process and the micro effects. The analysis of the data follows Habermas’ (1984) discursive process, which involves marshalling evidence, informed by a ‘middle range’ methodology (Laughlin, 1995, 2004) to develop a convincing argument concerning a particular situation.

Adoption of activity management practices: a note on the extent of adoption and the influence of organizational and cultural factors

We examine the extent to which activity management practices are adopted by Australian business units at each of Gosselin's [Gosselin, M., 1997. The effect of strategy and organizational structure on the adoption and implementation of activity-based costing. Acc. Organ. Society 22 (2), 105–122] levels of Activity Analysis, Activity Cost Analysis and Activity-based Costing. We also examine the association between extent of adoption and the organizational factors of size and decision usefulness of cost information, and the business unit culture dimensions of innovation, outcome orientation, and tight versus loose control. Data were collected by mail survey questionnaire of a random sample of business units, with questionnaire design and distribution based on Dillman's [Dillman, D.A., 2000. Mail and Internet Surveys: The Tailored Design Method. John Wiley & Sons Inc., New York] Tailored Design Method. Adoption rates are found to be higher than in prior studies, suggesting the continuing relevance of activity management practices and the advantage of using Gosselin's (1997) levels. All factors were found to be associated with all activity management practices. In particular, business unit size and all three business unit culture dimensions were found to be associated with extent of adoption of Activity Analysis (AA) and Activity Cost Analysis (ACA), while decision usefulness and the cultural dimensions of outcome orientation and tight versus loose control were associated with Activity-based Costing.

Utilização de informações de custos no processo gerencial: estudo comparativo entre a hotelaria do Estado do Rio Grande do Norte e a região nordeste, sob a ótica da gestão econômico-financeira

Este trabalho tem como objetivo apresentar os resultados de uma pesquisa realizada nos hotéis de médio e grande porte do Rio Grande do Norte, sobre a utilização de informações de custos no processo gerencial. Para isso, comenta a importância das informações sobre custos, demonstra os resultados obtidos em relação à utilização de métodos de custeios, centro de custos e conhecimento da margem de contribuição, comparando-os ao resultado de uma pesquisa realizada no nordeste. Após analisar o resultado da pesquisa, percebe-se que os hotéis existentes no Rio Grande do Norte, principalmente os independentes, assim como os do nordeste, embora reconheçam a importância das informações sobre os custos, precisam inserir no seu gerenciamento ferramentas capazes de fornecer essas informações, o que pode tornar os hotéis mais competitivos.

Developing cost management in customer–supplier relationships: three case studies

This study describes cost management development projects in three customer–supplier relationships and analyzes these projects from the perspective of relationships. Differences in suppliers’ objectives, actions taken, and results gained in the projects were found in the explorative study, although the customer's objective was the same in all cases. The use of cost information depended on the balance of power between firms, on the trust between personnel, and on the volume of the firms’ mutual business.

JUST-IN-TIME PRODUCTION, AUTOMATION, COST ALLOCATION PRACTICES AND IMPORTANCE OF COST INFORMATION: AN EMPIRICAL INVESTIGATION IN NEW ZEALAND-BASED MANUFACTURING ORGANIZATIONS

This paper is based on an empirical study of the relationship between Just-in-Time (JIT) production, automation, cost allocation practices and the relative use of cost information for making and evaluating managerial decisions. The study uses a survey questionnaire to collect data from a random sample of New Zealand-based manufacturing organizations. Hypotheses were tested using bivariate tests and multiple regression analysis. The results indicate that the choice of activity-based cost allocations is negatively associated with the extent to which firms use a JIT approach to manufacturing, but positively associated with increased automation in the factory, as hypothesized. Furthermore, the increased use of JIT production is found to be associated with the decreased use of detailed costing information. The study found some support for the hypothesis that increased automation is associated with the increased use of costing information for managerial decisions.

The Effect of Misclassification Costs on Neural Network Classifiers

The potential of neural networks for classification problems has been established by numerous successful applications reported in the literature. One of the major assumptions used in almost all studies is the equal cost consequence of misclassification. With this assumption, minimizing the total number of misclassification errors is the sole objective in developing a neural network classifier. Often this is done simply to ease model development and the selection of classification decision points. However, it is not appropriate for many real situations such as quality assurance, direct marketing, bankruptcy prediction, and medical diagnosis where misclassification costs have unequal consequences for different categories. In this paper, we investigate the issue of unequal misclassification costs in neural network classifiers. Through an application in thyroid disease diagnosis, we find that different cost considerations have significant effects on the classification performance and that appropriate use of cost information can aid in optimal decision making. A cross‐validation technique is employed to alleviate the problem of bias in the training set and to examine the robustness of neural network classifiers with regard to sampling variations and cost differences.

At What Cost? Using Cost Information for Purchasing and Providing Community Care for People with Learning Disabilities

An appreciation of costs and cost effectiveness has been central to policy initiatives, reports by the Audit Commission and the 1990 community care reforms. This paper argues the case for a more informed use of cost information in services for people with learning disabilities, using examples from research into the costs and outcomes of care in the community. Commissioners and providers of services should address a number of methodological considerations when using cost information to purchase services or review their competitiveness or cost‐effectiveness. Principles for using information are offered, including comprehensiveness, taking account of variations, making comparisons and linking costs with outcomes. The wider implications for commissioners and providers are then discussed in the context of policy issues and management concerns.

Strategic goals of quality costing in Japanese companies

One of the most popular topics in the field of management accounting or cost management in Japan is quality costing which evaluates the effectiveness of quality management through depicting quality in terms of cost measures. In this way it can help improve such activities. Until recently Japanese business made little use of this costing technique despite their efforts to improve quality: only a few accurately grasped how essential cost is to these efforts. More recently, several Japanese companies have begun setting up quality cost systems. By so doing they have identified the important problems that arise from these systems. This paper traces the historical development of this costing technique in the U.S.A. and Japan and reviews its basic concepts and philosophies. On the basis of the experiences of two Japanese companies it discusses what is needed to develop quality costing as a strategic cost management tool. The nature of strategic cost management has not been established precisely. The various requirements assigned to it by different authors may be summarized in the following two definitions. First, strategic cost management can interpret ways of effecting cost reduction in order to improve profitability of individual products or product groups at early business-process stages such as product planning, research and development and designing, when the greater part of product life-cycle costs are settled. Second, it entails a political or intentional use of cost information for the sake of organizational reform or change at another phase. The latter half of this paper identifies which of these features can be found in Japanese quality cost systems. The following discussion emphasizes differences between management systems in Japanese and Western companies and the ways in which quality management and cost management are perceived in Japan and the West. However, the conclusions this paper draws are applicable not only to Japanese business but to companies in other countries as well.

The use of cost information by managers when making short-term decisions

(1993). The use of cost information by managers when making short-term decisions. European Accounting Review: Vol. 2, No. 2, pp. 432-436.

The use of cost‐based priorities in random and flow shops

AbstractThis article evaluates the use of cost information for establishing priorities in a job shop. Most traditional research in the area of job shop scheduling uses only time‐oriented rules and performance criteria when in reality, minimizing total cost is the most appropriate objective.Utilizing a simulation model of randomly‐routed and flow job shops, several priority rules are evaluated on the basis of time performance, primarily on‐time completions, as well as on the basis of cost performance: the minimization of work‐in‐process (WIP) investment. The priority rules use either time information only, cost or value information only, or both types of information in a composite manner. An additional concept examined is that of the speed of a job relative to its due date. Speed is examined for different profitability classes of jobs: high, medium, and low. It is often important that high profit jobs are completed on time, while low profit jobs may not be as critical.The priority rules are simulated at four utilization levels and several replications are made to make statements about the statistical significance of the results. The results show that a time rule, such as critical ratio, performs poorly on cost measures, moves high and low profit jobs indiscriminately, and completes significantly fewer jobs on time at high utilization levels than the cost rules examined. One of the cost rules that utilizes the value added to a job is the best performer in terms of cost and does quite well in completing jobs on time.