Quality, cost and delivery performance indicators and activity-based costing

Added Title

IEEE International Conference on Management of Innovation and Technology (5th : 2010)
ICMIT2010

College

Ramon V. Del Rosario College of Business

Department/Unit

Accountancy

Document Type

Conference Proceeding

Source Title

5th IEEE International Conference on Management of Innovation and Technology, ICMIT2010

First Page

869

Last Page

874

Publication Date

7-30-2010

Abstract

This paper addresses an important issue -the nature of and evidence for success in the transfer costing of internal or shared services and products within a company. The case of Activity-Based Costing (ABC) is used to explore how the proponents have developed a framework linking Quality, Cost and Delivery (QCD) components of products and services. The QCD performance indicators, which are the natural properties of products and services, will form part of the Service Level Agreements between the internal service providers (Shared Services Centers) and internal customers (Profit Centers) of the company. This framework optimizes the use of overhead expenses to the end products of the company. This paper also discusses the various cost components of the products and services using the full absorption costing principle. It is a revolutionary idea in the sense that all activity costs are considered variable costs and product costs come from activity costs using various cost drivers. © 2010 IEEE.

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Digitial Object Identifier (DOI)

10.1109/ICMIT.2010.5492805

Disciplines

Accounting

Keywords

Activity-based costing; Cost accounting; Quality control; Service-level agreements

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