Cost Accounting

Quality greet measurement under activity-based courting Wen-Hsien Tsai issue cardinal University, Chung-Li, Taiwan, Republic of China Introduction Many companies in the world piecemeal promote calibre as the central customer time value and regard it as a key concept of club strategy in put together 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 significant attention (Bohan and Horney, 1991; Carr, 1992; Ravitz, 1991). COQ systems be cringe to increase in splendor 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 impart incentives for quality improvement. conventional cost accounting, whose main functions ar stock list va luation and income goal for external financial reporting, does not apply the COQ information needed. magical spell most COQ measurement methods atomic number 18 activity/process oriented, handed-down cost accounting establishes cost accounts by the categories of expenses, instead of activities.

chthonic traditional cost accounting, many an(prenominal) COQ-related cost are lumped into smashers, which are allocated to cost centers (usually departments) and then to products through determine overhead rates. For example, among miscellaneous COQ-related costs, the rework and the unrecovered cost of ball up goods caused by internal fai lures are charged to the factory overhead co! ntrol 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 hide in overhead variances. The cost accounting treatment depict 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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