Search results

The reciprocal method for allocating support department costs is preferred over the direct and step-down methods because it captures all support services provided to other departments. However, even as business organizations increase the number of support departments and their costs, the adoption of the reciprocal method has been hindered by mathematical difficulties in solving simultaneous equations. This paper illustrates spreadsheet matrix functions that remove the difficulties associated with the reciprocal method. The algebraic expressions for reciprocated costs commonly presented in accounting textbooks are used to form an equivalent matrix relationship. Then spreadsheet matrix functions easily compute reciprocated costs for support departments from the matrix relationship, and also allocate the reciprocated costs to other departments.

This chapter takes a critical perspective on the conventional wisdom that more advanced cost allocation methods have the potential to provide a more accurate picture of “true” cost, inevitably leading to optimal product mix and pricing decisions, and ultimately to greater profitability.

Two concrete examples of the growing divergence between cost accounting theory and practice – the failures of activity-based costing and the reciprocal method of service department cost allocation to take root in practice – are examined through the lens of post-structuralist literary theory.

The findings suggest that economic truth has been devoured in an accounting simulation. The accounting model no longer reflects any profound economic reality; it precedes reality.

Much of the mainstream management accounting literature remains theoretically grounded in the belief that ‘true’ cost exists, as an object, which is revealed through our cost accounting systems. This chapter raises serious questions about this foundation, and therefore the practical applicability of a great deal of research.

Society has granted the accounting profession a great deal of responsibility and autonomy, largely on the confidence that it has historically provided an objective and truthful model of economic reality. The findings in this chapter suggest that the basis for the accounting profession’s preferential charter in society ought to be critically examined.

At a time where research has advanced toward an ever-narrower focus on self-referential tautologies and ever more complex modeling techniques, this chapter provides a new and stimulating, albeit provocative, perspective to yet unresolved issues in management accounting research and practice.

The purpose of this paper is to develop a new systematic method for a multi-unit organization to cope with the cost allocation problem, which is an extension of the reciprocal method. As uncertainty is the inherent characteristic of business environments, assuming changes in engaged parameters is almost necessary. The outputs of the model determine the total value of each unit/business lines or product.

In the proposed method, contrary to existing models, business units are able to transfer their costs to other units, and also, not necessarily transfer the total costs of support units completely. The DEMATEL approach, which finds all relationships between different parts of a system, is also applied for computing effects of the units’ expense paid to each other. Moreover, a fuzzification approach is used to capture linguistic experts’ judgments about related data.

Being closer to the real-world problem in comparison to the previous approach, the proposed systematic approach encompasses the other cost allocation models.

Applying the proposed model for a system like a multi-unit organization, the total price of each unit/business line can be obtained. Moreover, this cost allocation process guides the related decision-makers to better manage the expenses that each unit pays the others.

In the existing studies, business units cannot pay expense support units. However, in the proposed method, the business units are able to pay expenses for other units, and also, not necessarily pay total expenses for support unit completely. Moreover, considering engaged parameters as fuzzy numbers makes the proposed model closer to real-world problems.

Purpose – Drawing from social psychology and economics, I propose several mechanisms that may affect ownership stakes among entrepreneurs, including norms of distributive justice, negotiation constraints, and network constraints. The processes are explored empirically for a representative dataset of entrepreneurial teams.

Methodology/Approach – Between 1998 and 2000, entrepreneurial teams were sampled from the U.S. population for the Panel Study of Entrepreneurial Dynamics. I analyze the distribution of ownership stakes at both the individual and group levels.

Findings – The results suggest that principles of macrojustice, affecting the distribution of resources in teams as a whole, deviate considerably from principles of microjustice, affecting the resources received by individual entrepreneurs. While aggregate inequality increases in teams that have a diverse set of members, the effect is not reducible to discrimination on the basis of individual status characteristics. Instead, the relational demography of teams – characterized in terms of the degree of closeness in network ties and homogeneity in demographic attributes – serves as a uniquely social predictor of between-group variation in economic inequality.

Originality/Value of the paper – Empirical research on inequality has paid little attention to the process of group exchange in organizational start-ups, where entrepreneurs pool resources and skills in return for uncertain or indirect payoffs. This paper offers both theoretical frameworks and empirical analyses to shed light on economic inequality among entrepreneurs.

The purpose of this study is to examine the design, development and implementation of responsibility centre management at a mid-sized Canadian university, within the context of decentralized decision-making. More specifically our study focused on the design, development and implementation of a revenue and cost allocation process known as transparent activity–based budgeting system (TABBS).

The authors conducted this study using a qualitative case study methodology, rooted in grounded theory, as the primary approach to collect and analyse data, and report the findings. Primary data were collected from ten participants using semi-structured interviews.

The main takeaways from our research are that (1) such systems take time to design, develop and implement, (2) consultation, communication and information sharing and model adjustment and refinement are important enabling mechanisms, (3) internal and external events posed significant challenges, (4) although such systems are often designed keeping in mind several intended outcomes, there exists the possibility of experiencing some unintended consequences and (5) the juxtaposition of the above has the potential to negatively or positively impact organizational performance.

The research demonstrates that the design, development and implementation of a complex resource allocation model is an important element of a responsibility-centred approach to planning and decision-making. It highlights the importance and contribution of enabling mechanisms as well as the challenges that large, complex organizations may confront when introducing change.

Regardless of the approach taken to allocating common costs, is cost allocation really necessary? Argues that such an exercise may not make any difference to the final outcome ‐ the company’s final profit or loss figure. Takes as an example the University of Clemson, USA’s system of costing and reporting, and describes the university’s Finance Committee’s challenge to that system.

Points out that selecting a new general ledger system can be a very difficult undertaking in today’s environment because of the variety of hardware platforms and choices of software products. Based on the composite experiences of several companies, provides an organized approach to evaluating and selecting a new general ledger system, including a sample general ledger software evaluation instrument.

The nature of the affinitive relationships expressed through thesaural related terms has been studied in ten thesauri, of which eight were examined in detail. The relationships have been analyzed in terms of Farradane's relational indexing ‘operators’ and the four fundamental categories of concepts derived by the Classification Research Group in England. The results are tabulated to show the numbers of different categories of descriptors, category pairs, and descriptor/related‐term pairs; the relative occurrences of category pairs and of the different relational operators are shown in histograms. The results are considered in detail and show that there is no consistent pattern of relations in use. Problems in improving the nature and selection of related terms in thesauri are discussed.

This study aims to develop an optimal tolerance allocation strategy involves integrating the unique transfer (UT) approach and the difficulty coefficient evaluation (DCE) routine in an interactive hybrid method. This method combines the strengths of both UT and DCE, ensuring simultaneous utilization for enhanced performance. The proposed tolerancing model manifests an integrated computer-aided design (CAD) tool.

By combining UT and DCE based on failure mode, effects and criticality analysis (FMECA) tool and the Ishikawa diagram, the proposed collaborative hybrid tool ensures an efficient and optimal tolerance allocation approach. The integration of these methodologies not only addresses specific transfer challenges through UT but also conducts a thorough evaluation of difficulty coefficients via DCE routine using reliability analysis tools as FMECA tool and the Ishikawa diagram. This comprehensive framework contributes to a robust and informed decision-making process in tolerance allocation, ultimately optimizing the design and manufacturing processes.

The presented methodology is implemented with the aim of generating allocated tolerances that align with specific difficulty requirements, facilitating the creation of a mechanical assembly characterized by high quality and low cost. To substantiate and validate the conceptual framework and methods, an integrated tool has been developed, featuring a graphical user interface (GUI) designed in MATLAB. This interface serves as a platform to showcase various interactive and integrated tolerance allocation approaches that adhere to both functional and manufacturing prerequisites. The proposed integrated tool, designed with a GUI in MATLAB, offers the capability to execute various examples that effectively demonstrate the benefits of the developed tolerance transfer and allocation methodology.

The originality of the proposed approach is the twining between the UT and DCE simultaneous in an integrated and concurrent tolerance transfer and allocation model. Therefore, the proposed approach is named an integrated CAD/tolerance model based on the manufacturing difficulty tool. The obtained results underscore the tangible advantages stemming from the integration of this innovative tolerance transfer and allocation approach. These benefits include a notable reduction in total cost and a concurrent enhancement in product quality.

Planning for transition to a new educational setting, such as changing grades or moving from primary to high school, is important for all students but particularly for those who may require additional support for their individual needs. Research shows that transition planning and implementation for students with disability are best supported through collaboration and information sharing among all stakeholders. In Australia, the Disability Standards for Education (DSE) (2005) mandate consultation between education providers, students with disability, and their carers as part of the process of enrollment so that reasonable adjustments to support a student's progress can be identified and implemented. This chapter reports on two innovative approaches to the organization of transition and support systems for students with disability. The findings reveal that effective transition “doesn't just happen” and that school leaders need to establish effective mechanisms for consultation and collaboration.