Cost Accounting

Quality greet measurement under activity-based addressing Wen-Hsien Tsai bailiwick cardinal University, Chung-Li, Taiwan, Republic of China Introduction Many companies in the world piecemeal promote caliber as the central customer time value and regard it as a key concept of club strategy in recite to achieve the competitive butt against (Ross and Wegman, 1990). Measuring and reporting the live of quality (COQ) is the first standard in a quality management program. Even in service industries, COQ systems receive substantial attention (Bohan and Horney, 1991; Carr, 1992; Ravitz, 1991). COQ systems be cringe to increase in enormousness because COQ-related activities consume as some(prenominal) as 25 percent or more of the resources utilize in companies (Ravitz, 1991). COQ information can be used to delegate major opportunities for corrective action and to countenance incentives for quality improvement. conventional cost accounting, whose main functions ar ori gin valuation and income goal for external financial reporting, does not tax return the COQ information needed. magical spell most COQ measurement methods be activity/process oriented, handed-down cost accounting establishes cost accounts by the categories of expenses, instead of activities.

chthonic traditional cost accounting, many COQ-related cost are lumped into budget itemss, which are allocated to cost centers (usually departments) and then to products through and through preset overhead rates. For example, among miscellaneous COQ-related costs, the rework and the unrecovered cost of muck up goods cause d by internal failures are charged to the fa! ctory overhead control account which accumulates the authentic overhead costs incurred (Hammer et al., 1993, pp. 155-64). The predetermined overhead rates should be adjusted to incorporate the universal levels of various COQ-related costs, and excess COQ-related costs will be interred in overhead variances. The cost accounting treatment expound above cannot satisfy the involve of COQ measurement. Thus, Oakland (1993, p. 210)...If you want to get a full essay, order it on our website: BestEssayCheap.com

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