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The purpose of this paper is to highlight the particularities of the time consumption of transactions performed in an insurance firm and the prospective impact on costing.

This paper uses the results of an archival study conducted on data collected in an insurance firm.

The results suggest that the reasons underlying the heterogeneity of transactions’ time consumption are multiple and rule out a systematic and unique explanation. They lend support to the importance of the “human effect” in explaining the time consumption of service transactions and support the need for more research into the evolution of marketing thought that subordinates the concept of transaction to the concept of relationship. In addition, our results not only suggest that the drivers of time consumption and their importance are contingent on the type of service activity performed within the same firm, but also that inside a generic service activity, deviations in time consumption remain due to the provision of specific services.

Services have their own characteristics which make it difficult to trace their resource consumption. Yet limited research has focused on examining the impact of services’ characteristics on predicting costs. Our findings contribute to our understanding of such impact and cast doubt on the possibility of obtaining accurate costs for very detailed transactions for an acceptable cost-benefit trade-off.

This study extends the theoretical analyses of Duration-Based Costing (DBC), an alternative cost measurement system to Activity-Based Costing (ABC). DBC is simpler than ABC and uses the production cycle time to assign costs. This simplicity should allow DBC to be a better costing method for multiproduct firms that exhibit nonconstant returns to scale.

Data simulations for 1,000 cases and Data Envelopment Analysis (DEA) are used to analyze the production functions inside DBC and ABC models to determine their relative technical efficiency.

The results show that, for a given set of simulations, DBC shows more nonconstant returns to scale than does ABC. This corroborates prior research and suggests that a more complex costing system, such as ABC, may not always match the production technology of a multiproduct firm. Thus, DBC may have a higher level of accuracy than does ABC for firms that exhibit nonconstant returns to scale.

Since DBC has only recently been theoretically developed, this study is the first to analyze the relative technical efficiency of DBC compared to ABC.

This study should bring some further awareness of the implications of alternative costing methods. The limitation of DBC is that it does not capture other factors not driven by the production cycle time that could be necessary for management decision making. However, DBC is better for multiproduct firms than a more complicated costing system and does help decision makers determine whether the production process is operating efficiently. It is imperative that firms choose which costing methods fit the firm’s needs and economic structure.

To empirically test for an impact on profit performance when activity-based costing (ABC) is used in companies with customer service and low-price strategies. We also investigate whether the profit impact of ABC usage is affected by higher-quality information systems.

Survey.

We find a positive impact on profit performance when ABC is used by companies with customer service as a strategic priority but not when ABC is used by companies with lower emphasis on customer service. For companies emphasizing low-price strategies, we find a positive impact on profit performance, especially when ABC is used together with high-quality information systems.

This study develops a method of measuring strategic priorities of a firm. It divides firms into strategy groups based on their degree of emphasis on three strategic priorities: low price, flexibility, and customer service.

Identifies certain contexts when ABC is especially beneficial.

If the use of ABC information leads to better strategic and operational decisions, firm performance should improve. However, prior research on the impact of ABC on firm performance has found little to no connection and usually only when it is used with other practices. This is the first study to find an impact on profit performance for firms with customer service and low-price strategies and high-quality information systems.

This chapter explores the potential economic advantages and disadvantages of reusable plastic containers (RPCs) in the transport of fresh produce from growers to retail stores. The empirical research linking packaging to quantifiable economic and social benefits is reviewed. This study answers the question – what are the economic and social impacts of increased standardization of bulk packaging in the North American fresh produce supply chains? Implications for the potential use of RPCs and its impact on sustainability are explored.

The chapter describes data from grocery retailers who have implemented both one-way and reusable plastic containers for fresh produce distribution. A Time-Driven Activity-Based Costing (TD-ABC) analysis was conducted to capture and evaluate process times and product damage associated with the typical deployment of bulk containers in the grocery retailers’ distribution centers (DC), retail stores, and asset recovery centers of the supply chain. Economic measures were implemented and together with the social dimensions provided insights about sustainability-based implications.

Fresh produce shipments using the RPC technology had significantly less waste and damage representing potential social and economic benefits. The empirical findings included results about the economic impact of RPCs on the sustainability level of a typical supply chain for fresh food products.

The quantification of the economic and potential social sustainability for the explored packaging types constitutes an important contribution. Much of the previous research did not contain comprehensive assessments. The impact of technological change – the introduction and use of RPC in packaging – is examined. In addition, the supply chain scope for this research included most of the major activities that involve the packaging of fresh produce commodities in its practical dynamics.

Organizations desire more accurate cost systems as competition increases, and consequently increase cost system complexity, as cost systems with greater complexity are potentially more accurate than simpler systems. However, even complex systems are prone to impactful inaccuracies, for example, due to design or calculation issues, that can adversely affect decision-making and firm performance. The authors investigate whether and the extent to which cost system complexity and competition decrease managers’ attribution of cost-system-driven adverse firm effects to the cost system. The authors find greater cost system complexity (by inspiring greater confidence in the cost system) and higher competition (by providing a plausible external cause) decrease managers’ attribution of cost-system-driven adverse firm effects to the cost system. With both greater cost system complexity and higher competition, managers observing signals of material cost inaccuracies are potentially the least likely to attribute cost-system-driven adverse firm effects to the cost system.

This study examines challenges to the retrospective financial evaluation of continuous improvement (CI) activities. Through a review of the literature and active engagement with CI implementations, we identify several issues that may lead to divergence between operational and financial assessments. Out of this conflict emerges a set of concepts that we find important − the delineation of soft versus hard capacity benefits, the distinction between capacity used and capacity paid for, and the data gaps that relate to these benefits – and recognize operational improvement and financial improvement as distinct, yet interrelated, theoretical constructs. This study helps explain a series of persistent gaps in the management accounting literature: Conflict between operations and accounting managers, the divergent perspectives of Johnson and Kaplan after their publication of Relevance Lost (Johnson & Kaplan, 1987), and the need for both operational control (including detailed capacity control) and accounting control in CI firms. Instead of one control system being at odds with the other, or co-existing despite each other, each of these systems support a different component of the financial improvement process. Operational control systems in CI firms emphasize non-financial information and social and behavioral controls that empower decision-making by employees, while accounting control systems seek to motivate and translate operational gains into financial gains. Soft and hard benefits linked to capacity play an integral role in understanding the difference in focus of each control system, while data limitations help to explain why these systems remain loosely coupled in practice (or absent, as seems to be the case with detailed Capacity Management Systems).

This chapter proposes a contingency model that examines the most relevant contingent variables for understanding the factors that explain innovative costing techniques in a sample of firms investing in advanced manufacturing technologies (AMT firms). Furthermore, the aim of this study was also to ascertain whether AMT firms use significantly innovative managerial practices (IMPs).

The chapter uses material from a survey investigation and interviews with financial directors and the survey was conducted using a sample of AMT firms selected from an Italian industry. The method differs from previous studies in that it considers the relationship between a relevant contingency variable of AMT firms (i.e. the levels of integration, but also environmental uncertainty and size) and various innovative costing, a relationship that has not been previously explored. The research was developed from the relevant literature.

The results indicate that there is no association between innovative costing and AMT firms in general, however the findings show that activity-based costing (ABC) is positively associated with fully integrated AMT firms. Large AMT firms have the highest percentage of innovative costing usage, such as ABC and strategic costing (SC). The relationship between AMT firms that perceive a high degree of environmental uncertainty and innovative costing was supported by the data in case of strategic dimension (target costing (TC) and life cycle costing (LCC)). Expectations of a relationship between AMT firms and IMPs, such as just-in-time (JIT), total quality management (TQM) and activity-based management (ABM), were not supported by the data.

We recognise that specific research limitations might reduce their generalisation, especially the number of statistical observations.