Planning quality cost expenditures
Article Abstract:
Computation of expenditures on quality management requires careful thought on facts regarding its estimation. The measurement of the direct tradeoffs between voluntary and involuntary quality expenditures is not an easy task. Accountants are usually left to make subjective valuations which are not appropriate means of analyzing the effectiveness of expenditures. This could only result to unfit recommendations. Also, a graphical depiction of quality cost curves shows that the optimal level of tradeoff can not be correctly estimated. Also, this optimal point is not normally a stable variable owing to continuous process enhancement and reduction of quality cost spending. Lastly, it should be noted that a considerable quality improvement may only increase customer satisfaction but not short-term profits.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1992
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A government cost control program for private industry
Article Abstract:
The US Army's use of the Office of Management and Budget's (OMB) Circular number A-76 saved taxpayers over $400 million. The circular was applied by the Forces Command Management Engineering Activity (FORMEA) at Fort Drum, NY. Procedures outlined involve conducting cost comparisons, using both in-house estimates and outside bids. Classes of costs covered include: personnel, materials and supplies, overhead, federal tax, one-time conversion expenses, and conversion differentials. Management should consider ways of maintaining staff morale and motivation when vigorous cost reduction efforts such as those used at FORMEA are applied. Pressures to cut costs can also result in postponement of activities such as routine maintenance.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1988
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Running actual costs vs. standard costs
Article Abstract:
A method of harmonizing accounting with changes in technology and work environment is substituting running actual costs for the use of standard costs in the evaluation of performance and production costs. Running actual cost accounting has the advantages of: meshing with the concept of continuous improvement; facilitating the measurement of non-monetary productivity; and the accurate delineation of actual costs on a real-time basis. Managerial accountants believe that running actual costs provide better information than standard costs because they are: more accurate and current; more useful to pricing decisions; and easier to understand.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1989
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