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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 17:07
    Last Modified: 28 Jul 2010 19:37


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