Measuring the impact of product mix heterogeneity on manufacturing overhead cost

Article Abstract:

The effect of product mix heterogeneity (PMH) on manufacturing overhead cost (MOHC) is investigated. For the study, the researchers examined the PMH in three of a particular textile manufacturer's woven-fabrics plants from 1986 to 1990. PMH measurement is based on an approach adapted from the group technology literature of operations. Results show that MOHC is affected by the quantity and intensity of setups, and the level of heterogeneity in process specifications and quality standards of the product mix of a plant. It is also shown that the new measures of PMH are more reliable in quantifying MOHC than the conventional measure of PMH. Finally, findings indicate that experience resulting in heterogeneous mix of products minimizes PMH costs.

TEXTILE MILL PRODUCTS, Textile Mills, Research, Manufacturing industry, Manufacturing industries, Overhead costs, Product lines, Textile research

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British entrepreneurs and pre-Industrial Revolution evidence of cost management

Article Abstract:

Histories of accounting typically trace the beginnings of sophisticated cost management to the mid-1880s. The scientific management movement popularized the methods of cost management. However, an examination of the surviving records of 25 British industrial firms, primarily from the textile and iron industries, reveals evidence of cost management techniques in the early stages of the Industrial Revolution. There is evidence of relatively sophisticated cost management techniques in four areas: cost control, costing for routine and special decision making, overhead accounting, and standard costing.

United Kingdom, History, Accounting and auditing, Accounting, Corporations, House of Hanover, 1714-1901, Great Britain, Corporations, British

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Cost allocation in multiagent settings

Article Abstract:

Cost allocation is an accounting practice which involves the the allotment of a cost or a number of costs to given cost objectives. One type of cost allocation practiced in most business organizations is the assignment of corporate-level costs, including indirect costs, to profit centers. The supposed objective of this procedure is to direct the behavior of subordinates according to the expectations of top management. A model is introduced for using indirect cost allocation in motivating managers in settings with multiple divisions and where the influence of compensation contracts is minimal.

Models, Allocation (Accounting)

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