An analytical study of the characteristics of different cost Systems in order to develop a model to increase the motives Of management in the rationalization of demand for resources

shaheen, mohamed 


Introduction: over the past two decades, many innovative approaches to computing product costs have emerged in management accounting theory and practice, including activity-based costing (ABC ) systems, resource consumption accounting (RCA), and time-driven activity-based costing (TDABC) systems. These approaches have arisen as responses to changes in firms’ production environments, unique informational needs of particular decision environments, and to address perceived deficiencies in extant systems. These innovations share some common elements but are unique in other aspects. In understanding and evaluating them, important questions arise both from pedagogical and research perspectives. What are the defining features of each approach? In what ways are they different? Can we provide some insight into determining which approach may be most suitable for a particular decision-making environment? As there is limited prior work. Our specific objectives are twofold. First, we build a common terminology and platform with which to describe all of these approaches. Often, costing systems are only loosely defined in practice; for example, we might observe substantive differences between cost systems used by two firms, both of which claim to be using ABC. Thus, our exercise serves as an important pedagogical tool for promoting critical and comparative understanding of the various product costing approaches. We devote the first part of the paper to achieving this objective. We characterize these approaches as they have emerged through time, based on available literature and discussions with several academicians and practitioners.2 We employ a numerical example to illustrate the key differences and common features. Product Costs and Decisions Product costing systems involve allocation of the costs of shared capacity resources to cost objects such as products. (For accessible exposition, we generally use the term products; but, with minor modifications to the terminology, the discussion applies equally to any cost object such as customers, channels, and business segments.) Firms allocate these costs (sometimes termed capacity costs or, more often, labeled as fixed costs) for several reasons. First, allocation is required for valuing inventories and for computing income as per the generally accepted accounting principles (i.e., the inventory valuation role). Second, allocations help managers in making decisions relating to product planning and resource planning (i.e., the planning role). Third, allocations help managers in inducing desired organizational behavior and in dissuading or ‘‘taxing’’ undesired behavior (the behavior modification role). In this paper, our focus is mainly on the planning role of cost allocations, but we discuss the first and third roles as warranted. Research Objectives : The importance of this research is based on the following considerations: 1. The need for different levels of management in the companies to understand the characteristics and the nature of the curriculum and methods of cost measurement, and information that will be produced these systems and methods form that helps decision-makers access to achieve planned results accessible and will improve the quality of performance in these companies. 2. arrive at introducing a range of practical systems and methods of cost measurement and dealing with the distribution bases and customization for indirect costs among different cost complexes control ideas, which will help bridge the gap in scientific research and operational practices related to designing cost systems in the current business environment . 3. The need for companies under the current industrial environment to search for fundamentals and advanced techniques to improve the quality of measurement efficiency resulting in cost information as a prelude to increase the degree of accuracy of the information that is taken. Results and recommendations: we describe and illustrate the mechanics of four product costing systems using a common platform and terminology. In terms of usage, we expect that traditional volume-based systems dominate, followed by activity-based costing systems. As relatively new innovations, both TDABC and RCA are still gaining momentum, perhaps because potential users do not have a good sense of how these systems work and/or because limited information about their costs and benefits relative to other well-known costing systems is available. It is possible to reach some of the recommendations, taking into account certain aspects of caution, represented as follows: (1) it is difficult to determine the appropriate and proper measure of the size of the error in costs produced by the costing system in order to assess the overall effectiveness of the system data, and suggests several recent research has focused on the study of the costs phases tracking system to allocate and track costs and test systems the impact of the general economic environment characteristics (represented by the possibility of sharing and participation in the resources, and the degree of dispersion and differences in the costs of those resources), as well as the impact of costs system characteristics (represented in the number of cost that are configured complexes, the method of selection and the formation of complexes, and alternative ways to choose the causes of cost) Information on the costs that have been reported to be produced by the system cost compared to the correct information required output, in contrast to this quantitative approach this research has focused on his studies for a number of three-dimensional and the factors affecting the cost of different systems. (2) that this study has pointed to the application and modify existing cost systems costs but did not include a way clear costs for the proposed amendments to the systems of the current costs for the transition to the proposed system configuration (between the characteristics of both the statutory accounting activity-based accounting for the consumer) resources which are characterized by small size calculations and low measurement costs through the use of suitable Tjmaaah rates, though the collection needed to configure these rates information costs are relatively large, and most of that these costs will vary according to the industrial sectors employed therein and therefore, these systems may be useful in some sectors modern and developed industrial compared to other sectors, for example in a rapidly changing industry, which is characterized by continuous change in the industry used technology is required renovation costs systems greater than those systems in which the development of the manufacturing technology used does not happen. in such systems, the measurement systems time-dependent cost provides a convenient way for the development and modernization. (3) through the analysis of this research, the researcher implicitly assumes that there is a range of systems to the appropriate information (for example private enterprise resource planning), which enables us to combine the provision of operational data and cost data in detail systems. (4) as well as the research has given a limited degree of concentration and study the function of production that significant savings appear in the size and economic scope, the researcher believes that there is a great need to do many of the research that explores how in the case of production systems where there are many economic savings that characterized by a degree of maturity in dealing with the available resources by cost systems taking into account the style and nature of the measurement system and the costs of the application. (5) It is possible to emphasize that the study, which has through the search could be affected by the shortage in the presence of a reliable descriptive statements about the extent to which it is possible that alternative systems are used in practice, and whether such use is linked to on a regular basis with some of the properties the nature of the user's production system, and the degree of complexity in the product / customer mix Specifications, company size, etc., factors and characteristics.

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Keywords cost Systems - resource consumption accounting - time-driven activity-based costing
Issue Date Oct-2013
Publisher مجلة الفكر المحاسبي، قسم المحاسبة والمراجعة جامعة عين شمس
Journal مجلة الفكر المحاسبي، قسم المحاسبة والمراجعة جامعة عين شمس، العدد الثالث، السنة السابعة عشر. 

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