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Cost Accounting: A Managerial Emphasis
01 Jan 1972-
TL;DR: In this paper, the authors present an overview of cost terms and their application in the management of cost in the context of accounting, including flexible budgets, variable budgets, and management control.
Abstract: 1. The Accountant's Role in the Organization. 2. An Introduction to Cost Terms and Purposes. 3. Cost-Volume Profit Analysis. 4. Job Costing. 5. Activity-Based Costing and Activity-Based Management. 6. Master Budget and Responsibility Accounting. 7. Flexible Budgets, Variances, and Management Control: I 8. Flexible Budgets, Variances, and Management Control: II. 9. Inventory Costing and Capacity Analysis. 10. Determining How Costs Behave. 11. Decision Making and Relevant Information. 12. Pricing Decisions and Cost Management. 13. Strategy, Balanced Scorecard, and Strategic Profitability Analysis. 14. Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis. 15. Allocation of Support Department Costs, Common Costs and Revenues. 16. Cost Allocation: Joint Products and Byproducts. 17. Process Costing. 18. Spoilage Rework, and Scrap. 19. Quality, Time, and the Theory of Constraints. 20. Inventory Management, Just-in-Time, and Backflush Costing. 21. Capital Budgeting and Cost Analysis. 22. Management Control Systems, Transfer Pricing, and Multinational Considerations. 23. Performance Measurement, Compensation, and Multinational Considerations.
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TL;DR: The authors argue that the separation of decision and risk-bearing functions observed in large corporations is common to other organizations such as large professional partnerships, financial mutuals, and nonprofits. But they do not consider the role of decision agents in these organizations.
Abstract: ABSENT fiat, the form of organization that survives in an activity is the one that delivers the product demanded by customers at the lowest price while covering costs.1 Our goal is to explain the survival of organizations characterized by separation of "ownership" and "control"-a problem that has bothered students of corporations from Adam Smith to Berle and Means and Jensen and Meckling.2 In more precise language, we are concerned with the survival of organizations in which important decision agents do not bear a substantial share of the wealth effects of their decisions. We argue that the separation of decision and risk-bearing functions observed in large corporations is common to other organizations such as large professional partnerships, financial mutuals, and nonprofits. We contend that separation of decision and risk-bearing functions survives in these organizations in part because of the benefits of specialization of
14,045Â citations
TL;DR: In this article, the authors analyze the survival of organizations in which decision agents do not bear a major share of the wealth effects of their decisions and argue that separation of decision and risk bearing functions survives in these organizations in part because of the benefits of specialization of management and risk-bearing but also because of an effective common approach to controlling the implied agency problems.
Abstract: This paper analyzes the survival of organizations in which decision agents do not bear a major share of the wealth effects of their decisions. This is what the literature on large corporations calls separation of ownership and control. Such separation of decision and risk bearing functions is also common to organizations like large professional partnerships, financial mutuals and nonprofits. We contend that separation of decision and risk bearing functions survives in these organizations in part because of the benefits of specialization of management and risk bearing but also because of an effective common approach to controlling the implied agency problems. In particular, the contract structures of all these organizations separate the ratification and monitoring of decisions from the initiation and implementation of the decisions.
2,810Â citations
TL;DR: In this paper, an improved model, based on ideas of organizational control and effectiveness, is put forward which suggests appropriate directions for future work that will be both perceptive and cumulative.
Abstract: Contingency theories of management accounting have become a current vogue but have produced few significant new results. By surveying the development and content of these theories it is argued that they have been based on an inadequate and insufficiently articulated model. An improved model, based on ideas of organizational control and effectiveness, is put forward which suggests appropriate directions for future work that will be both perceptive and cumulative.
1,433Â citations
TL;DR: The e3-value approach methodology shows how to model business requirements and improve business–IT alignment, in sophisticated multi-actor value constellations that are common in electronic commerce.
Abstract: Innovative e-commerce ideas are characterised by commercial products yet unknown to the market, enabled by information technology such as the Internet and technologies on top of it. How to develop such products is hardly known. We propose an interdisciplinary approach, e3-value, to explore an innovative e-commerce idea with the aim of understanding such an idea thoroughly and evaluating it for potential profitability. Our methodology exploits a requirements engineering way of working, but employs concepts and terminology from business science, marketing and axiology. It shows how to model business requirements and improve business---IT alignment, in sophisticated multi-actor value constellations that are common in electronic commerce. In addition to the e3-value approach methodology, we also present the action research-based development of our methodology, by using one of the longitudinal projects we carried out in the field of online news article provisioning.
968Â citations
TL;DR: This work identifies necessary and sufficient conditions on the joint density function of the signals under which linear aggregation, a simple and commonly employed way to construct a performance evaluation measure, is optimal.
Abstract: Several accounting and other signals are generally available for the construction of a managerial performance evaluation measure on which an optimal compensation contract is based. The demand for aggregation in evaluating managerial performance arises because reporting all the basic transactions and other nonfinancial information about performance is costly and impracticable (see Ashton [1982], Casey [1978], and Holmstrom and Milgrom [1987]). We identify necessary and sufficient conditions on the joint density function of the signals under which linear aggregation, a simple and commonly employed way to construct a performance evaluation measure, is optimal. This characterization suggests that the linear form of aggregation is optimal for a large class of situations. Focusing on performance measures that are linear aggregates enables us to determine the relative weights on the individual signals in the optimal linear aggregate, since these weights are invariant for all realizations of the signals. We interpret these weights in terms of statistical characteristics (sensitivity and precision) of the joint distribution of the signals.
885Â citations