scholarly journals Product-Mix Decisions Under Activity-Based Costing With Resource Constraints And Non-proportional Activity Costs

2011 ◽  
Vol 14 (4) ◽  
pp. 39 ◽  
Author(s):  
Massood Yahya-Zadeh
Keyword(s):  
Resource Constraints ◽  
Theory Of Constraints ◽  
Activity Based Costing ◽  
Product Mix ◽  
Cost Structures ◽  
Short Run ◽  
Activity Cost ◽  
Added Benefit ◽  
Technological Constraints ◽  
Activity Costs

<span>Companies adopting activity-based costing as a management and decision-making tools should be aware of its potential drawbacks. Activity-based costing relies heavily on the assumption of proportional activity cost structures. Further, it ignores resource and technological constraints. I argue in this article that both problems can be addressed through the integration of the activity-based costing with operational decisions based on Goldratts Theory of Constraints, (TOC). The proposed approach offers the added benefit of mitigating the short-run bias of the TOC approach in product-mix decisions.</span>

scholarly journals Activity-Based Costing And The Theory Of Constraints: Using Time Horizons To Resolve Two Alternative Concepts Of Product Cost

2011 ◽  
Vol 14 (1) ◽  
pp. 83 ◽  
Author(s):  
Ralph B. Fritzsch
Keyword(s):  
Strategic Planning ◽  
Integrated Approach ◽  
Theory Of Constraints ◽  
Activity Based Costing ◽  
Decision Tool ◽  
Product Cost ◽  
Planning And Control ◽  
Time Horizons ◽  
Short Run ◽  
And Control

<span>Activity-based costing and the Theory of Constraints have generated a substantial literature that reflects the importance of these topics with practitioners. These two methods appear to represent conflicting viewpoints of product cost. Rather than trying to resolve the question of whos right, each method is examined with respect to its implicit assumptions about time horizons. The Theory of Constraints emerges as a short-run decision tool while Activity-Based Costing has its primary application in strategic planning and control. The problems associated with these methods if time horizons change are examined and suggestions for an integrated approach incorporating elements of both methods are presented.</span>

scholarly journals Skylar, Inc.: Traditional Cost System vs. Activity-Based Cost System – A Managerial Accounting Case Study

2018 ◽  
Vol 4 (2) ◽  
pp. 55
Author(s):  
Qianyun (Ivy) Huang
Keyword(s):  
Direct Costs ◽  
Activity Based Costing ◽  
Managerial Accounting ◽  
Cost System ◽  
System A ◽  
Activity Cost ◽  
The Difference ◽  
Product Costs ◽  
Activity Costs

This case is about a fictitious office workstation manufacturing company “Skylar Inc.” and their implementation of the traditional cost system and the activity-based cost system (ABC, hereafter) when allocating product costs. The case focuses on the application of activity-based costing in assigning costs to activity cost pools, calculating activity rates, and assigning activity costs to cost objects. It also highlights the difference between the traditional cost system and ABC in regards to allocating manufacturing and non-manufacturing overhead costs and assigning direct costs to products. This case is designed to provide students with both number crunching exercises and theoretical discussions of the topics.

scholarly journals Green Activity-Based Costing Production Decision Model for Recycled Paper

Energies ◽  
2020 ◽  
Vol 13 (10) ◽  
pp. 2413 ◽  
Author(s):  
Chu-Lun Hsieh ◽  
Wen-Hsien Tsai ◽  
Yao-Chung Chang
Keyword(s):  
Mathematical Programming ◽  
Programming Model ◽  
Paper Industry ◽  
Labor Cost ◽  
Production Model ◽  
Theory Of Constraints ◽  
Carbon Equivalent ◽  
Activity Based Costing ◽  
Recycled Paper ◽  
Green Production

Using mathematical programming with activity-based costing (ABC) and based on the theory of constraints (TOC), this study proposed a green production model for the traditional paper industry to achieve the purpose of energy saving and carbon emission reduction. The mathematical programming model presented in this paper considers (1) revenue of main products and byproducts, (2) unit-level, batch-level, and product-level activity costs in ABC, (3) labor cost with overtime available, (4) machine cost with capacity expansion, (5) saved electric power and steam costs by using the coal as the main fuel in conjunction with Refuse Derived Fuel (RDF). This model also considers the constraint of the quantity of carbon equivalent of various gases that are allowed to be emitted from the mill paper-making process to conform to the environmental protection policy. A numerical example is used to demonstrate how to apply the model presented in this paper. In addition, sensitivity analysis on the key parameters of the model are used to provide further insights for this research.

scholarly journals Cost modelling of the product mix from mining operations using the activity-based costing approach

2016 ◽  
Vol 69 (1) ◽  
pp. 97-103 ◽  
Author(s):  
Dennis Travagini Cremonese ◽  
Giorgio De Tomi ◽  
Manoel Rodrigues Neves
Keyword(s):  
Activity Based Costing ◽  
Mining Operations ◽  
Product Mix ◽  
Cost Modelling

Estimating Activity Costs: How the Provision of Accurate Historical Activity Data from a Biased Cost System Can Improve Individuals' Cost Estimation Accuracy

2007 ◽  
Vol 19 (1) ◽  
pp. 133-159 ◽  
Author(s):  
Dan L. Heitger
Keyword(s):  
Cost Estimation ◽  
Estimation Accuracy ◽  
Activity Data ◽  
Research Attention ◽  
Cost System ◽  
Initial Cost ◽  
Activity Cost ◽  
Historical Activity ◽  
The Cost ◽  
Activity Costs

An integral component of effective cost control and performance evaluation is the ability to accurately estimate relationships between activities and overhead costs (i.e., activity costs). Individuals using a single cost pool system often have to rely on memory of historical activity data when estimating activity costs. If individuals' recall of data is representative of the historical data, then reliance on memory should not be detrimental to cost estimation accuracy. However, individuals often possess incorrect initial beliefs about activity costs. These incorrect beliefs are expected to serve as an anchor from which individuals make insufficient adjustments when estimating activity costs based on memory of historical activity data. Multiple cost pool systems frequently provide biased standard rates; however, such systems also provide accurate historical activity data when individuals estimate costs. I extend prior accounting research by experimentally examining whether a multiple cost pool system's provision of accurate historical activity data improves activity cost estimation for individuals with incorrect cost beliefs even when the cost system also provides biased standard rates. The main contribution of the study is its finding that the multiple cost pool system's provision of historical activity data improves individuals' adjustments from their incorrect initial cost beliefs when estimating activity costs, thereby increasing their estimation accuracy. The results suggest that this improved adjustment from incorrect initial cost beliefs occurs because the provision of historical activity data improves individuals' recognition of how wrong their initial cost beliefs were in reality. This result is achieved even though the cost system provides biased standard rates. The ability of flawed cost systems to improve individuals' activity cost estimation in other such ways has received little research attention and is important because of its potential for improving managerial decision making.

The Product-Mix Optimization with outside Processing Based on Theory of Constraints Oriented Cloud Manufacturing

2011 ◽  
Vol 121-126 ◽  
pp. 1306-1310 ◽  
Author(s):  
Bing Zheng ◽  
Yi Cong Gao ◽  
Yun Wang
Keyword(s):  
Analytical Solution ◽  
Optimization Problem ◽  
Cloud Manufacturing ◽  
Theory Of Constraints ◽  
Multi Objective Optimization ◽  
Product Mix ◽  
Final Model ◽  
Processing Problem ◽  
Multi Objective ◽  
Optimization Formulation

In order to solve the multi-objective product-mix optimal problems oriented cloud manufacturing, SPEA2+ is used to realize the outside processing problem of lifting cross sliding trimensional parking equipment (multi-section trimensional parking equipment), which oriented cloud manufacturing. The outside processing problem is formulated as a multi-objective optimization problem and identified an analytical solution. The case illustration of parts of PSH2 lifting cross sliding trimensional parking equipment is taken as an example, examining the multi-objective optimization model. The model enables managers to determine which products to manufacture and which to outside processing. The solution of the multi-objective optimization formulation enables managers to apply the model by computing an operational ratio. The final model is simpler to apply and requires the computation of fewer variables than other prevalent models.

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