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Cost Accounting (cost + accounting)
Selected AbstractsCompetition and Cost Accounting: Adapting to Changing Markets,CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2002Ranjani Krishnan Abstract The relation of competition and cost accounting has been the subject of conflicting prescriptions, theories, and empirical evidence. Practitioner literature and textbooks argue that higher competition generally requires more accurate product costing. Theoretical economic analysis, in contrast, predicts that the optimal level of product-costing accuracy is sometimes higher at lower levels of competition. Results of survey research are inconsistent, suggesting a need for further identification of conditions under which higher competition leads to more accurate product costing. This study shows experimentally that individuals' choices of the level of product-costing accuracy depend not only on the current level of competition but also on the previous level of competition , that is, on an interaction between market structure (monopoly, duopoly, and four-firm competition) and market history (increasing versus decreasing competition). In the experiment, subjects decide on the quantity of data to collect at a pre-set price per datum to support more accurate product-cost estimates. Subjects collect the most cost data (i.e., choose the most accurate product costing) in monopoly, collect the least in duopoly, and an intermediate amount in the four-firm market, consistent with the pattern of optimal cost-data collection in Hansen's 1998 model. The process of convergence to the optimum differs significantly across market types and market histories, however. Subjects who begin in four-firm competition adapt more successfully to change than those who begin in monopoly. The lowest levels of decision performance occur when ex-monopolists face their first competitor: they overreact to this first encounter with competition and overspend on cost data. [source] Environmental and Material Flow Cost Accounting: Principles and Procedures edited by Christine JaschJOURNAL OF INDUSTRIAL ECOLOGY, Issue 5 2009Rick Reibstein No abstract is available for this article. [source] Competition and Cost Accounting: Adapting to Changing Markets,CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2002Ranjani Krishnan Abstract The relation of competition and cost accounting has been the subject of conflicting prescriptions, theories, and empirical evidence. Practitioner literature and textbooks argue that higher competition generally requires more accurate product costing. Theoretical economic analysis, in contrast, predicts that the optimal level of product-costing accuracy is sometimes higher at lower levels of competition. Results of survey research are inconsistent, suggesting a need for further identification of conditions under which higher competition leads to more accurate product costing. This study shows experimentally that individuals' choices of the level of product-costing accuracy depend not only on the current level of competition but also on the previous level of competition , that is, on an interaction between market structure (monopoly, duopoly, and four-firm competition) and market history (increasing versus decreasing competition). In the experiment, subjects decide on the quantity of data to collect at a pre-set price per datum to support more accurate product-cost estimates. Subjects collect the most cost data (i.e., choose the most accurate product costing) in monopoly, collect the least in duopoly, and an intermediate amount in the four-firm market, consistent with the pattern of optimal cost-data collection in Hansen's 1998 model. The process of convergence to the optimum differs significantly across market types and market histories, however. Subjects who begin in four-firm competition adapt more successfully to change than those who begin in monopoly. The lowest levels of decision performance occur when ex-monopolists face their first competitor: they overreact to this first encounter with competition and overspend on cost data. [source] Assessing the Information Content of Mark-to-Market Accounting with Mixed Attributes: The Case of Cash Flow HedgesJOURNAL OF ACCOUNTING RESEARCH, Issue 2 2007FRANK GIGLER ABSTRACT We examine how outsiders rationally interpret a reported loss on derivatives when the application of mark-to-market accounting to cash flow hedges creates a mixed attribute problem. We find that because of the mixed attribute problem, the information content of mark-to-market accounting is related to the information content of historical cost accounting in a very specific way. This relationship allows us to identify the circumstances under which mark-to-market accounting facilitates and when it detracts from the objective of providing an early warning of potential financial distress. We show that the reporting of an impending derivative loss by a distressed firm can actually lead outsiders to infer that the firm is in a better financial position than what they would have inferred under the silence associated with historical cost accounting. Without the mixed attribute problem, mark-to-market accounting would always yield more accurate assessments of the firm's financial position. [source] Are Selling, General, and Administrative Costs "Sticky"?JOURNAL OF ACCOUNTING RESEARCH, Issue 1 2003Mark C. Anderson A fundamental assumption in cost accounting is that the relation between costs and volume is symmetric for volume increases and decreases. In this study, we investigate whether costs are "sticky",that is, whether costs increase more when activity rises than they decrease when activity falls by an equivalent amount. We find, for 7,629 firms over 20 years, that selling, general, and administrative (SG&A) costs increase on average 0.55% per 1% increase in sales but decrease only 0.35% per 1% decrease in sales. Our analysis compares the traditional model of cost behavior in which costs move proportionately with changes in activity with an alternative model in which sticky costs occur because managers deliberately adjust the resources committed to activities. We test hypotheses about the properties of sticky costs and how the degree of stickiness of SG&A costs varies with firm circumstances. [source] Three innovations in cost accountingJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 3 2005Alan Vercio Leading-edge cost measurement does not necessarily mean the latest "alphabet soup" solution or yet another vendor's software solution. The foundation for useful and relevant cost measurement has a long and time-tested history. © 2005 Wiley Periodicals, Inc. [source] Comparative Energy, Environmental, and Economic Analysis of Traditional and E-commerce DVD Rental NetworksJOURNAL OF INDUSTRIAL ECOLOGY, Issue 3 2007Deepak Sivaraman This study is a comparative life-cycle assessment (LCA) of two competing digital video disc (DVD) rental networks: the e-commerce option, where the customer orders the movies online, and the traditional business option, where the customer goes to the rental store to rent a movie. The analytical framework proposed is for a customer living in the city of Ann Arbor, Michigan in the United States. The primary energy and environmental performance for both networks are presented using a multicriterion LCA. The package selected by the traditional network is responsible for 67% of the difference in total energy consumption of the two alternatives. Results show that the e-commerce alternative consumed 33% less energy and emitted 40% less CO2 than the traditional option. A set of sensitivity analyses test the influence of distance traveled, transportation mode, and reuse of DVD and DVD packaging on the final results. The mode of transportation used by the customer in the traditional business model also affects global emissions and energy consumption. The customer walking to the store is by far the best option in the traditional network; however, the e-commerce option performed comparatively better despite all transportation modes tested. A novel economic indicator, ESAL, is used to compare different transportation modes based on the level of stress exerted on the pavement. The two networks are compared on the basis of cost accounting; consistent with its energy and environmental advantages, the e-commerce network also exerts lesser economic impact, by $1.17, for the functional unit tested. [source] The Impact of Standard Setting on Relevance and Reliability of Accounting Information: Lower of Cost or Market Accounting Reforms in ChinaJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 3 2005Ziyun Yang During the period from 1998 to 2000, China implemented several new asset write-down regulations that mandate lower of cost or market accounting (LCM) for most non-cash assets. This is a study of the relevance and reliability of those regulations for investors in China. The study measures the association of net asset value with market value of equity and the association of accounting income with stock return, on both a historical cost accounting (HCA) basis and on an LCM basis. A fixed-effects model controlling both year and firm effects is used in a balanced panel sample. The panel regressions show high levels of explanatory power. LCM values can be relevant but may be measured with sufficient error that they do not improve the prediction of firm values. Reliability is measured using non-nested, overlapping model comparison tests (J and Cox). The paper also considers whether discretionary motivations influence the amount of write-down. The study supports the relevance of LCM reforms, but finds that reliability is not increased over HCA during the period under study. Reliability appears to be reduced by the voluntary nature of LCM provisions during part of the period and by the effects of opportunism for some firms in the sample. [source] "Revenue Accounting" in the Age of E-Commerce: A Framework for Conceptual, Analytical, and Exchange Rate ConsiderationsJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 1 2002Jonathan C. Glover This paper explores "revenue accounting" in contrast to traditional "cost accounting". Revenue accounting serves the information needs of managers and investors in planning and controlling a firm's sales activities and their financial consequences, especially in the age of e-commerce. Weaknesses of traditional accounting have become particularly evident recently, for example, the lack of 1) revenue mileposts, 2) revenue sustainability measurements, and 3) intangibles capitalization. The paper emphasizes the need to develop a conceptual framework of revenue accounting and, as a tentative measure, proposes five basic postulates and five operational postulates of revenue accounting. On the side of analytical frameworks, the paper explores some tentative remedies for the weaknesses. Several revenue mileposts are explored to gauge progress in earning revenues and a Markov process is applied to an example involving mileposts. Revenue momentum, measured by the exponential smoothing method, is examined as a way of getting feedback on revenue sustainability; and the use of the sustainability concept in the analysis of "fixed and variable revenues" is illustrated. A project-oriented approach in a manner similar to capital budgeting and to Reserve Recognition Accounting is proposed by treating each customer as a project. Standardization of forecasts are also considered as an important way of bypassing the capitalization issue. Finally, while e-commerce is inherently global, issues specific to global operations are highlighted, namely, exchange rate issues when venture capitalists and the start-up company use different currencies producing different rates of return on the same project. [source] Hospital Costs and Revenue Are Similar for Resuscitated Out-of-hospital Cardiac Arrest and ST-segment Acute Myocardial Infarction PatientsACADEMIC EMERGENCY MEDICINE, Issue 6 2010Robert Swor DO Abstract Objectives:, Care provided to patients who survive to hospital admission after out-of-hospital cardiac arrest (OOHCA) is sometimes viewed as expensive and a poor use of hospital resources. The objective was to describe financial parameters of care for patients resuscitated from OOHCA. Methods:, This was a retrospective review of OOHCA patients admitted to one academic teaching hospital from January 2004 to October 2007. Demographic data, length of stay (LOS), and discharge disposition were obtained for all patients. Financial parameters of patient care including total cost, net revenue, and operating margin were calculated by hospital cost accounting and reported as median and interquartile range (IQR). Groups were dichotomized by survival to discharge for subgroup analysis. To provide a reference group for context, similar financial data were obtained for ST-segment elevation myocardial infarction (STEMI) patients admitted during the same time period, reported with medians and IQRs. Results:, During the study period, there were 72 admitted OOCHA patients and 404 STEMI patients. OOCHA and STEMI groups were similar for age, sex, and insurance type. Overall, 27 (38.6%) OOHCA patients survived to hospital discharge. Median LOS for OOHCA patients was 4 days (IQR = 1,8 days), with most of those hospitalized for ,4 days (n = 34, 81.0% dying or discharged to hospice care). Median net revenue ($17,334 [IQR $7,015,$37,516] vs. $16,466 [IQR = $14,304,$23,678], p = 0.64) and operating margin ($7,019 [IQR = $1,875,$15,997] vs. $7,098 [IQR = $3,767,$11,138], p = 0.83) for all OOHCA patients were not different from STEMI patients. Net income for OOCHA patients was not different than for STEMI patients (,$322 vs. $114, p = 0.72). Conclusions:, Financial parameters for OOHCA patients are similar to those of STEMI patients. Financial issues should not be a negative incentive to providing care for these patients. ACADEMIC EMERGENCY MEDICINE 2010; 17:612,616 © 2010 by the Society for Academic Emergency Medicine [source] | ||||||||||