scholarly journals Analysis of Calculation Methods Currently Practised at V4 Agricultural Holdings

2021 ◽  
Vol 13 (4) ◽  
pp. 19-32
Author(s):  
Lenka Hudáková Stašová ◽  
Keyword(s):  
Decision Making ◽  
Agricultural Sector ◽  
Cost Management ◽  
Cost Calculation ◽  
Activity Based Costing ◽  
Calculation Methods ◽  
Accurate Identification ◽  
Effective Cost ◽  
Abc Method ◽  
Frequent Reason

This paper assesses calculation methods in the Visegrad 4 countries (Czech Republic, Hungary, Poland and Slovakia) and, based thereon, recommends and considers activity-based costing (ABC) in the agricultural sector, while evaluating manager knowledge of ABC as an appropriate alternative to outdated, “conventional” methods of calculating costs that are used in practice. It was found that a majority of agricultural holdings in the V4 are currently using conventional cost calculation methods and the most frequent reason for their failure to incorporate ABC is low awareness among managers. Farms and agricultural holdings that have introduced ABC and utilise it to assign their costs evaluate its benefits highly positively, in particular, ABC’s more accurate identification of costs, mainly overheads; more effective cost management and the accuracy of price estimates. From this analysis and assessment, introduction of ABC is recommended for companies in order to obtain the different benefits associated with the method. Successfully implementing ABC leads to a number of advantages, especially in the inevitable decision-making agricultural holdings face about high overhead costs. From the information obtained, managers at agricultural holdings have little information, in most cases, about ABC as an appropriate alternative to the outdated “conventional” cost estimate methods practised today. It is therefore important to work on raising managers' awareness of new approaches to costing by publishing scientific articles with specific examples from practice, pointing out the advantage of the ABC method, especially with high overheads, which are almost the rule in agricultural holdings.

scholarly journals Statistical analysis of suitability of the activity based costing method in agricultural enterprises

2020 ◽  
Vol 6 (4) ◽  
pp. 20-42
Author(s):  
Lenka Hudáková Stašová
Keyword(s):  
Decision Making ◽  
Cost Effective ◽  
Practical Experience ◽  
Statistical Testing ◽  
Cost Calculation ◽  
Activity Based Costing ◽  
Calculation Methods ◽  
Agricultural Enterprises ◽  
Significant Difference ◽  
Abc Method

Purpose. The paper focuses on comparing two cost calculation method describing the principle, utilisation, advantages and disadvantages of the traditional mark-up on cost pricing (overhead method) against Activity Based Costing (ABC), a new, unconventional method of cost calculation. The aim is to prove that the ABC method allocates costs differently to individual products, in a different proportion thereto, unlike the mark-up method. The ABC method is considered by us more accurate because it views differently how costs originate. Methodology / approach. Statistical data testing was carried out, using the Kolmogorov-Smirnov and Shapiro-Wilk W tests, followed by a paired t-test, and completed with the Wilcoxon signed-ranks test. The data was evaluated for eight selected products, whose overhead value was calculated from both marking-up and ABC, out of a selected set of primary agricultural enterprises in Slovakia. Finally, the results were assessed with an unproven statistically significant difference between the calculation methods found. Results. This paper emphasises a different view of costing with the ABC method which, unlike conventional methods, offers multidimensionality and variation of cost tracking based on real and relevant data. A statistically significant difference between the methods was demonstrated for three pairs of variables (out of a total eight pairs). Statistically significant differences were found for cattle, wheat and sugar beets. Although statistical testing has not shown any significant difference between the methods, ABC is still considered a more accurate costing method for allocating overhead. The argument here follows from the very principle and method of ABC allocation of overheads. Unlike traditional methods, ABC offers multidimensional and diverse cost tracking based on real and relevant data. The direct allocation of costs (using an equal budget base) to products and services does not necessarily capture actual cost flows. Because overheads are higher on farms, misleading data can be provided. Practical experience in agriculture seems to imply that the ABC method is the most cost-effective tool for cost control and encourages its further use in budgeting, planning, modelling and decision-making. Originality / scientific novelty. The paper focuses on cost calculations made in agricultural holdings, often a neglected topic in agricultural management. In particular, high overhead costs in agriculture deserve more attention. Their exact allocation to products is important. The paper also focuses on assessing the suitability of calculation methods in agricultural holdings and on pointing out the need for accurate cost allocation. Practical value / implications. The main results and ideas here can be beneficial for managing agricultural holdings. Where the proportion of overheads is higher, management may be provided with misleading data. Practical experience shows the ABC method to be currently the most cost-effective tool for controlling costs and provides opportunities for its use in budgeting, planning, modelling and decision-making on product range structure, alongside other options.

scholarly journals The application of activity-based costing in the cost calculation of thermal-power enterprise

2020 ◽  
pp. 254-254
Author(s):  
Rong Zhang ◽  
Jian-Li Li
Keyword(s):  
Value Chain ◽  
Cost Management ◽  
Thermal Power ◽  
Value Added ◽  
Cost Calculation ◽  
Activity Based Costing ◽  
Resource Network ◽  
Power Enterprise ◽  
Abc Method ◽  
Operation Center

The advantages of Activity-Based Costing (ABC) include promoting the basic budget of activities and improving the management of activities, process and activity chain (value chain). ABC method, as an important tool of cost management in management accounting, extends the management of cost to the whole value-chain in the enterprise, and it also effectively changes the limitation of the focus of the law of manufacture costing on the study of the process concerning the making of certain products, thus offering adequate help to the enterprise in establishing systematic cost management. This paper, starting from the construction of thermal-power enterprises and through an analysis of the application of ABC method in improving the quality and increasing the efficiency of the thermal enterprise, aims to point out the ways to eliminate the non-value-added activities so as to improve the management of value chain of the construction of the thermal-power enterprises by setting up multi-thermal-resource network operation center, thermal provision center and thermal-power enterprises.

scholarly journals The concept of implementing the activitybased costing in multi- assortment manufacturing enterprise – case study (part 2)

2020 ◽  
Vol 2020 (146) ◽  
pp. 305-314
Author(s):  
Daria MOSKWA-BĘCZKOWSKA ◽  
Keyword(s):  
Cost Management ◽  
Theoretical Perspective ◽  
Unit Cost ◽  
Cost Calculation ◽  
Activity Based Costing ◽  
Main Research ◽  
The Board Of Directors ◽  
Effective Cost ◽  
Production Company

Purpose: As mentioned in the first part of the article, its main objective is to develop and present a concept for the implementation of activity-based costing in a company dealing with multi-assortment production of bookbinding machinery. Design/methodology/approach: The main research method used is a case study of the implementation of activity-based costing in a selected multi-assortment production company. The concept of an original model of implementation of activity-based costing in the analyzed company as well as the benefits resulting from this implementation are presented in this article. Findings: The carried-out research indicates that the calculation of cost according to the concept of activity-based costing is more useful for effective cost management than traditional methods. After the development and presentation of the model of the analyzed costing method, the board of directors of the examined company began seriously considering the implementation of this method within their business unit. Research limitations/implications: The main barrier in the conducted research was the lack of conviction on the part of the company about the advantages of the presented unit cost calculation method and its usefulness for effective cost management within the company. Originality/value: The article is an example of the practical application of activity-based costing in multi-assortment production. Its content is directed both to persons dealing with these matters from the theoretical perspective, as well as company owners and heads of controlling or production departments.

Use of target-costing and kaizen-costing to ensure effective cost management in interorganizational relations of agribusiness organizations

2020 ◽  
pp. 24-34
Author(s):  
Lyudmila Ivanovna Khoruzhy ◽  
Yury Nikolaevich Katkov ◽  
Anastasiya Alekseevna Romanova
Keyword(s):  
Theoretical Analysis ◽  
Cost Management ◽  
Organizational Management ◽  
Cost Calculation ◽  
Interorganizational Relations ◽  
Target Costing ◽  
Interorganizational Cooperation ◽  
Effective Cost ◽  
Calculation System ◽  
Organizational Cooperation

The article, based on the theoretical analysis, gives definitions of inter-organizational cooperation, inter-organizational management accounting, cost calculation system within the framework of interorganizational relations. Peculiarities of calculation of cost of interorganizational cooperation are disclosed, accounting practices of target-costing and kaisen-costing calculating system are described. The advantages of introducing and using inter-organizational accounting and a cost calculation system based on target costing and kaisen costing have been identified. Possible problem areas are identified when introducing these calculation systems into the practical activities of agro-formations.

scholarly journals Factors Driving Success of Cost Management Practices in Integrated Project Delivery (IPD)

2020 ◽  
Vol 12 (22) ◽  
pp. 9539
Author(s):  
Faris Elghaish ◽  
M. Reza Hosseini ◽  
Saeed Talebi ◽  
Sepehr Abrishami ◽  
Igor Martek ◽  
...  
Keyword(s):  
Management Practices ◽  
Cost Management ◽  
Project Delivery ◽  
Extensive Literature ◽  
Activity Based Costing ◽  
Integrated Project Delivery ◽  
Building Information ◽  
The Usa ◽  
Effective Cost ◽  
Integrated Project

Integrated project delivery (IPD) is a mode of project procurement recognised as facilitating superior project performance. However, this success is contingent on effective cost management practices that share cost data with all project stakeholders in an accurate, timely and transparent manner. Despite an extensive literature on aspects of cost management, none identifies the essential ingredients required of an effective cost management system, sufficiently robust to support successful IPD projects. Candidate cost management augmenting practices are drawn from the literature, and presented for scrutiny in questionnaire form, to fifty IPD experienced experts, based in the USA, UK and Australia. Findings reveal activity-based costing (ABC) to be effective at identifying overhead costs and creating accounting transparency. Similarly, earned value management (EVM), in combination with ABC, is effective at developing mathematical models for equitable risk-reward distribution. Moreover, web-based management systems, as supported by Building Information Modelling (BIM), are effective at generating trust and collaboration on which IPD success depends. A questionnaire survey using purposive sampling was conducted to assess the factors driving success of implementing IPD regarding cost management process. The contribution to knowledge made by this paper is in identifying requisite support mechanisms essential to elevate traditional cost management practices to the higher standard needed to ensure IPD delivery success.

scholarly journals Application of the Activity-Based Costing Method for Unit-Cost Calculation in a Hospital

2015 ◽  
Vol 8 (1) ◽  
pp. 165 ◽  
Author(s):  
Mahdi Javid ◽  
Mohammad Hadian ◽  
Hossein Ghaderi ◽  
Shahram Ghaffari ◽  
Masoud Salehi
Keyword(s):  
Unit Cost ◽  
Cost Price ◽  
Medical Services ◽  
Cost Calculation ◽  
Accounting System ◽  
Activity Based Costing ◽  
Hospital Managers ◽  
Cost System ◽  
Abc Method ◽  
The Cost

<p><strong>BACKGROUND:</strong> Choosing an appropriate accounting system for hospital has always been a challenge for hospital managers. Traditional cost system (TCS) causes cost distortions in hospital. Activity-based costing (ABC) method is a new and more effective cost system.</p> <p><strong>OBJECTIVE:</strong> This study aimed to compare ABC with TCS method in calculating the unit cost of medical services and to assess its applicability in Kashani Hospital, Shahrekord City, Iran.‎</p> <p><strong>METHODS:</strong> This cross-sectional study was performed on accounting data of Kashani Hospital in 2013. Data on accounting reports of 2012 and other relevant sources at the end of 2012 were included. To apply ABC method, the hospital was divided into several cost centers and five cost categories were defined: wage, equipment, space, material, and overhead costs. Then activity centers were defined. ABC method was performed into two phases. First, the total costs of cost centers were assigned to activities by using related cost factors. Then the costs of activities were divided to cost objects by using cost drivers. After determining the cost of objects, the cost price of medical services was calculated and compared with those obtained from TCS.‎</p> <p><strong>RESULTS:</strong> The Kashani Hospital had 81 physicians, 306 nurses, and 328 beds with the mean occupancy rate of 67.4% during 2012. Unit cost of medical services, cost price of occupancy bed per day, and cost per outpatient service were calculated. The total unit costs by ABC and TCS were respectively 187.95 and 137.70 USD, showing 50.34 USD more unit cost by ABC method. ABC method represented more accurate information on the MAJOR COST COMPONENTS.</p> <p><strong>CONCLUSION:</strong> By utilizing ABC, hospital managers have a valuable accounting system that provides a true insight into the organizational costs of their department.<strong></strong></p>

scholarly journals PENERAPAN ACTIVITY BASED COSTING SYSTEM DALAM MENENTUKAN HARGA POKOK KAMAR HOTEL (STUDI PADA HOTEL GREEN EDEN MANADO)

2018 ◽  
Vol 13 (02) ◽  
Author(s):  
Shelby Estereniy Siby ◽  
Ventje Ilat ◽  
Meily Y. B. Kalalo
Keyword(s):  
Descriptive Analysis ◽  
Simple Calculation ◽  
Cost Calculation ◽  
Accurate Information ◽  
Activity Based Costing ◽  
Economic Method ◽  
Costing System ◽  
Abc Method ◽  
June July ◽  
The Cost

The Activity of Based Costing (ABC) Method is a simple calculation to determine the cost of price / services to explain that the activity were the reason one to make rise the cost of the products, and products that consume activity.The hotel can use Activity Based Costing (ABC) System Method to determine hotel room rate because when they use the Activity economic method in detail, the quality of decision can be improve to be better and making more accurate. The purpose of this research is “to obtain the accurate information about Activity Based Costing” in counting the cost calculation rooms Hotel Green Eden Manado since from June, July, and August 2017. The method of analysis that I used is “Descriptive Analysis Method”, by conducting to interview to the hotel manager and doing the data collection regarding the costs and amounts of fees. Based on the analysis, there are find that Activity Based Costing System for the month of June. Superior room type, Deluxe room and Suite resulted that the cost of price rooms were lower to compared with the cost by hotel management. For July the calculation of the cost Superior room type was higher than the cost of calculated by the management Hotel. And for the type of Deluxe rooms and Suite rooms were lower to compared with the cost by the Hotel. And for the month of August the calculation for Superior, Suite, and Deluxe rooms resulted that the cost were higher than the cost calculation used by The Hotel Management.Keywords : Activity Based Costing,  The cost of rooms.

scholarly journals The concept of implementing the activitybased costing in multi-assortment manufacturing enterprise – theoretical aspects (part 1)

2020 ◽  
Vol 2020 (146) ◽  
pp. 295-303
Author(s):  
Daria MOSKWA-BĘCZKOWSKA ◽  
Keyword(s):  
Theoretical Perspective ◽  
Unit Cost ◽  
Cost Calculation ◽  
Activity Based Costing ◽  
Traditional Methods ◽  
Main Research ◽  
Effective Cost ◽  
The Subject ◽  
Costing System ◽  
Calculation Procedures

Purpose: The main objective of the article is to develop and present a concept for the implementation of activity-based costing in a company dealing with multi-assortment production of bookbinding machinery. However, due to the publishing requirements, the article was divided into two parts – the first one describes the theoretical approach to the problem and the second one presents the case study. Therefore, the aim of this part of the considerations is to present the shortcomings of traditional methods of unit cost calculation in the light of the literature on the subject and to present the main assumptions and calculation procedures of the concept of activity-based costing. Design/methodology/approach: The main research methods used in this part of the considerations are: analysis of the literature on the subject and inference. Findings: The result of the research is the conclusion that the traditional methods of unit cost calculation, i.e. full costing and variable costing, are insufficient for effective cost management in the company. Originality/value: This part of the analysis presents in a synthetic way the identified main disadvantages of traditional unit costing methods. An alternative solution to the discussed problem was also presented here, i.e. the change of the applied costing system into an activity based costing system – analyzing its assumptions and calculation procedures. This content is directed both to persons dealing with these matters from the theoretical perspective, as well as company owners and heads of controlling or production departments.

scholarly journals Methodological and integration aspects of abc-method application in trade organizations

2010 ◽  
Vol 4 (5-6) ◽  
pp. 107-110
Author(s):  
Klychova Guzaliya S. ◽  
Bagaev Ilya V.
Keyword(s):  
Consumer Demand ◽  
Cost Management ◽  
Activity Based Costing ◽  
Abc Method

In conditions of declining consumer demand and deficit of credit resources more and more managers of Russian companies think of necessity of introducing effective methods and systems of cost management. One of the most relevant is method of “Activity Based Costing” (ABC-method). Since, in western experts’opinion sectors of service and trade are adjusted to use ofABC-method even more than production, we should refer once more to the main methodological and integration aspects ofABC-method application and consider it from position of trade organization.

scholarly journals Methodological and integration aspects of ABC-method application in trade organizations

2012 ◽  
Vol 6 (3-4) ◽  
pp. 49-52
Author(s):  
Guzaliya S. Klychova ◽  
Ilya V. Bagaev
Keyword(s):  
Consumer Demand ◽  
Cost Management ◽  
Activity Based Costing ◽  
Abc Method

In conditions of declining consumer demand and deficit of credit resources more and more managers of Russian companies think of necessity of introducing effective methods and systems of cost management. One of the most relevant is method of “Activity Based Costing” (ABC-method). Since, in western experts’ opinion sectors of service and trade are adjusted to use of ABC-method even more than production, we should refer once more to the main methodological and integration aspects of ABC-method application and consider it from position of trade organization.

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