The uses of product costs in decision making in British manufacturing industry

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Brierley, J.A. (2013)
  • Publisher: Inderscience

This paper assess the use of product costs in decision-making. Using questionnaire responses and interviews with British management accountants, product costs are used all the time in decision making to support the profit motive in profit/investment centres and to control costs in cost centres. They are used only sometimes in decision making when there are limitations in the product costing system and/or the market has a greater role in decision-making. Operating units use product costs as attention directing information in decision making: to highlight loss making products for special studies to identify any further information required, because market-based information has an important role in decision making and when product costs are not accurate enough to use directly in decision-making. Operating units use product costs directly in decision making because they have confidence in the accuracy of costs or because of ignorance of using the information as attention directing information.
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    Drury, C. and Tayles, M. (1995) Issues arising from surveys of management accounting practice , Management Accounting Research, Vol. 6, No. 3, pp.267-280.

    Lukka, K. and Granlund, M. (1996) Cost accounting in Finland: current practice and , European Accounting Review, Vol. 5, No. 1, pp.1-28.

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