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Product / service cost system design in Malaysian companies

Sithambaram, Nagarethnam (2002) Product / service cost system design in Malaysian companies. Doctoral thesis, University of Huddersfield.

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Despite much publicity given to the criticisms relating to product cost
measurement and the prevailing costing systems since the mid-1980s, there was
a scarcity in surveys relating to this area. In the 1990s, studies on management
accounting practices and product-costing, focusing on the Activity-Based Costing
(ABC) increased, but mainly in Europe and the US. Therefore this research is
undertaken in Malaysia, to study the product-cost system design from a broader
perspective, and investigate the criticisms. The over-riding objective is to explore
the influence of explanatory variables on the design of product costing systems,
using the contingency theory framework explicitly, one of the major contributions
for this study. Other objectives include examining the extent to which different
cost information is used for different purposes; sophistication level of productcost
system maintained; prevalence of financial accounting mentality; treatment
of non-manufacturing costs in manufacturing companies; extent of ABC usage;
nature, content and role of profitability analysis.
A postal questionnaire survey was conducted giving a response rate of 27%.
Concrete evidence on the prevalence of financial accounting mentality is not
available as the overall findings indicated mixed responses. Investigation
revealed that 51% of the firms use unsophisticated, 42% maintain low
sophistication level and 7% maintain sophisticated systems. Only 6.5% of the
firms adopted ABC. Nevertheless the respondents were satisfied and perceived
their costing systems to be accurately assigning costs to products/services.
Although periodic profitability analysis is considered to be important for decisionmaking,
the content of it is questionable as a large number of firms use full costs
with arbitrary allocation bases or inappropriate cost drivers.
Only the variables 'size' (significant) and 'competitive environment' (weak
significant) influence sophistication levels maintained.
Finally the limitations of this study that may affect the possibility of generalising
the findings are acknowledged and suggestions for areas of future research

Item Type: Thesis (Doctoral)
Thesis advisorDrury,
Additional Information: EThOS Persistent ID
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HD Industries. Land use. Labor
Schools: The Business School
Depositing User: Graham Stone
Date Deposited: 02 Jun 2009 16:07
Last Modified: 04 Nov 2015 21:30


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