Profit Calculation in a late 14th century sole proprietorship, the case of Francesco DATINI

This paper examines the Profit on merchandise accounts (a forerunner of the income statement) in a sole proprietorship in Pisa that officially operated between 1386 and 1392, but took several months to finally end its activities, which it did in 1393. The Profit on merchandise account was where the balance on each goods account was transferred when all the items recorded in it were sold. The principal contribution of this paper is the identification of a unique approach to medieval product costing that ensured indirect expenses on merchandise were recovered from customers when sales took place, while earning an average return of over 10 percent on those costs. It also highlights the problems encountered when working with archival material that has deteriorated over time; and presents a research method that reconstructs missing data using the trail to original entries and contra entries recorded in double entry.

Knowing Your Product Costs: A Primer for Farmers and Food Entrepreneurs

This publication provides a basic introduction to product costing for farm businesses and food processing enterprises. It describes cost concepts, provides product costing examples, and briefly discusses software tools that can assist with cost analysis. The publication is intended to help farmers and food entrepreneurs understand product costing concepts and do their own cost calculations to assist with business decisions.

The influence of the importance of cost information, product diversity and accountants’ participation on the activity-based costing adoption

Purpose The purpose of this study is twofold. The first objective is to examine the impact of the importance of cost information and product diversity on the adoption of activity-based costing (ABC) by Kazakhstani poultry organizations. The second goal is to establish the moderating impact of accountants’ involvement in the design for the costing system on the relationship between product diversity and the adoption of the ABC system. Design/methodology/approach The questionnaire was sent to all 58 poultry organizations in Kazakhstan and eventually, 43 completed questionnaires were collected, which is 74% of all Kazakhstani poultry organizations. Findings The results show that there is indeed a positive relationship between product diversity and ABC adoption when the level of diversity is used concurrently with accountants’ involvement in the design of product costing. In addition, product diversity was identified as a significant negative predictor of ABC adoption. Originality/value This study updates the literature on the rate of ABC adoption in a developing country like Kazakhstan, more specifically, in the poultry industry. It complements the understanding of the factors that influence the ABC adoption by taking a synergistic approach to factors such as product diversity and accountant involvement. At the same time, this study is one of the first empirical attempts to test the moderative role of the participation of accountants in the development of calculation systems in the ABC adoption.

THEORETICAL AND METHODOLOGICAL APPROACHES TO THE INTERPRETATION OF THE CONCEPT OF «COSTS»

Introduction. An important component in the management system of the enterprise is the assessment of the effectiveness of management actions, which involves comparing the results of activities with the costs of achieving these results. As costs can be considered any cost of resources (fixed assets, materials, labour resources in the form of working time, wages, etc.). Methods. The theoretical and methodological basis of the study is a systematic approach and dialectical method of cognition, which were used to study the fundamental provisions of economics on the formation of cost management of vegetable enterprises. General scientific methods were used to achieve the goal of the study: analysis, synthesis, induction, deduction (determination of the essence of the category “costs”, generalization of the peculiarities of the formation of costs of agricultural enterprises and the basics of their management); abstract and logical (formulation of conclusions, proposals) and other generally accepted methods and modern economic and statistical techniques. Results. Summarizing the existing approaches to determining the nature of production costs, we can conclude that they represent a fee for the possibility of production (fee for the use of resources, services, works, etc.), which varies depending on the conditions of its implementation, which allows to achieve goals (the main of which in terms of market relations is profit maximization). Discussion. Ukraine's transition to IFRS will certainly improve the quality of economic information in the field of cost accounting and product costing, associated with a number of difficulties due to differences in management accounting methodology, as well as cost accounting according to IFRS and NP (S) of accounting. These include differences in terminology and categorization of the methodological apparatus, in the composition and principles of grouping and distribution of costs; different approaches to explaining the nature and origin of cost groups and their distribution; temporary focus in accounting and cost analysis. In our opinion, these difficulties can be solved and require further study and classification of differences in cost accounting systems, as well as the development of methods for transforming cost data generated in one of the systems adopted by the company as a basis for parallel format data. Keywords: costs, prime cost, resource, production, capital, wastage, losses.

Top Seven Trends in Management Accounting

Ultimately, costing principles, such as the causality principle, must be converted into practical practices with supporting tools. This chapter describes how cost modeling has evolved over the last century. It describes the trends and obstacles that have helped or delayed developments. These evolving areas and trends include (1) the expansion from product costing to include channel and customer profitability reporting and analysis, (2) the integration of managerial accounting with other enterprise and corporate performance management (EPM/CPM) methods, (3) the shift from historical reporting to predictive accounting (e.g., marginal/incremental costing, (4) driver-based budgeting and rolling financial forecasts, (5) customer lifetime value (CLV), (6) imbedding analytics into managerial accounting (e.g., correlation and regression analysis), (7) acceptance of two or more co-existing managerial accounting methods, and (8) chargebacks to internal users and service-level agreements of information technology (IT) and shared services.

Methodological basis of internal control in the costs management system of enterprises

In modern conditions the functioning of enterprises is influenced by a number of factors, which include a tough competitive environment, limited material resources necessary to carry out production activities, the economic crisis caused by the pandemic COVID-19. The main tasks, which should be solved to increase the effectiveness of the company's activity, are tasks, connected with minimization of expenses for production, works and services. To solve these tasks, it is necessary to implement effective and rational internal control. The article's purpose consists of studying of organizational aspects and development of directions of improvement of methodical provision of internal control of production costs and product costing. As one of the tools of internal control it is recommended to use developed working documents of internal control. These documents make it possible to carry out effective planning of internal control; to evaluate effectiveness of internal control and accounting systems, to systematize information received during inspection of primary accounting and observation of norms of consumption of material assets during production; to generalize results of inspection and reflection of violations and mistakes revealed during internal control.

Activity Based Costing around the World: Adoption, Implementation, Outcomes and Criticism

The purpose of this article is to provide systematic and critical literature review of studies related to activity-based costing around the world. The literature review covers articles from developed and developing countries and is organised to provide insights on four major aspects of ABC adoption, implementation, outcomes and criticism. The adoption of ABC is generally greater in developed countries as compared to developing countries. Among the key benefits of using ABC include better product costing that ultimately increases the profitability and competitiveness of a company. Using ABC results in greater transparency of costs which have implications for planning, controlling and decision making. Successful implementation of ABC is to deal effectively with the specific behavioral, technical and organizational factors. Most of the problems found in the literature were related to the practical, technical and system difficulties of ABC. Due to cultural and organizational issues many companies fail as techniques need modification when used in different settings.