Investigating impact of the order activity costing method on product cost calculations

Meade, David; Kumar, Sameer; Kensinger, Kevin R.

doi:10.1016/j.jmsy.2009.02.003

Cited by 4 publications

(2 citation statements)

References 16 publications

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“…This method, however, was and still is very criticized, mainly because of the apportioning rule, which aims that, somehow, all company´s costs must be inserted into the product cost. This method is assertive to ensure that all costs will be allocated in the company (Meade et al, 2008), but does not produce a clear picture of which costs really belong to the product , what are indirect costs and lost its managerial value when combined with other cost drivers (Vercio, 2008).…”

Section: Costing Methods and Lean Accountingmentioning

confidence: 99%

Application of Lean Accounting for production costs management in lean enterprises: a case study in an auto parts company

Soranso¹,

Meirelles²,

Rossetti³

2022

S. F. J. of Dev.

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The main purpose of this study is to analyse and to compare how the lean manufacturing changes, applied in the production system, are reflected in company´s financial reports. This case study practically compares the traditional accounting reports with the ones purposed by the Lean Accounting (LA) methodology version. The motivation of this case study started with the statement of unit managers of a Lean Manufacturing (LM) company, here called “lean enterprise”. They said that one of the greatest challenges, after the modifications in the production system, is the financial demonstration in costs reports. After change the production system from “push” to “pull”, the main structure for a cost per unit calculation and fix cost “dilution” are ruined. There is no mass production anymore, “the more, the better” philosophy does not lasts and the encountered results corroborate with the literature in regarding of the need of adapting the cost controlling system in Lean Enterprises.

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Section: Costing Methods and Lean Accountingmentioning

confidence: 99%

Application of Lean Accounting for production costs management in lean enterprises: a case study in an auto parts company

Soranso¹,

Meirelles²,

Rossetti³

2022

S. F. J. of Dev.

View full text Add to dashboard Cite

show abstract

“…The shift from manual labour to the use of modern production technology has resulted in factories needing to find ways to both reduce costs and to calculate and allocate costs more effectively. This has introduced hitherto unknown factors related to the actual costs and consequently causing inappropriate pricing or cost and price distortions [1,2] and a failure to clearly reflect the cost of each activity that occurs, whether in terms of direct costs or indirect costs.…”

Section: Introductionmentioning

confidence: 99%

ANNs in ABC Multi-driver Optimization Based on Thailand Automotive Industry

Amdee

Sonthipermpoon

Pongpattanasili

et al. 2016

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Abstract. The purpose of this research was to develop a method for Activity Based Costing (ABC) that provided accurate product production costs. ABC using Single Driver Activity Based Costing (SDABC) can result in distortion of the cost. A more accurate ABC cost calculation based on multiple cost drivers (CDs) in each activity has been devised and proven by considering the various cost drivers using the correlation coefficient or R 2 . The application of Artificial Neural Networks (ANNs) to choose the CDs is Multiple Drivers Activity Based Costing (MDABC). The ANNs choose the CDs by algorithms including Multilayer Perceptron and Back-propagation. The transfer function for hidden layers is the Log-Sigmoid Function and for the output layer is the Pure Linear transfer function. The results have demonstrated that using MDABC results in more accurate cost calculations than when using SDABC.The study found that both of the extended ABC method, SDABC and MDABC provide more accurate actual cost of production, and both are applicable to products with low turnover or those in a state of loss condition. However, MDABC is better used in situations which include a variety of production activities, while the SDABC method is best used in situations of the factory operations not being very complex. Overall, the resolution, or accuracy, of the calculated production costs is better using the MDABC method, but is more complicated in its use and operation. Computer-based ANNs overcome this problem of complexity.

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WITHDRAWN: Decision support system for product variety management

Helo

Kristianto

et al. 2013

Journal of Engineering and Technology Management

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Investigating impact of the order activity costing method on product cost calculations

Cited by 4 publications

References 16 publications

Application of Lean Accounting for production costs management in lean enterprises: a case study in an auto parts company

Application of Lean Accounting for production costs management in lean enterprises: a case study in an auto parts company

ANNs in ABC Multi-driver Optimization Based on Thailand Automotive Industry

WITHDRAWN: Decision support system for product variety management

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