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Applying strategic cost analysis concepts to capacity decisions: strategic cost analysis helps companies identify, analyze, and use strategically important resources for continuing success and growth of the business.
- Article from:
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Management Accounting Quarterly
- Article date:
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September 22, 2006
- Author:
- Juras, Paul; Peacock, Eileen
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Copyright informationCOPYRIGHT 2006 Institute of Management Accountants. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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EXECUTIVE SUMMARY The product with the highest unit profit may not be the product with the highest profit per unit of resource consumed. The Theory of Constraints (TOC), with its emphasis on throughput costing, offers one possible approach to profitability analysis, but it is focused on the short term. The authors discuss why throughput costing, in combination with ABC, is a better option to guide long-term, strategic decision making.
In the fall of 2005, Ford Motor Company announced a nearly 50% reduction in the number of suppliers it would use in the future. Soon after, Delphi Corp., the largest U.S. automotive parts manufacturer, announced its move into Chapter 11 ...
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Do you have enough cost information to make good decisions?
Nonprofit World;
November 1, 1997 ;
Cutt, James; Bragg, Denise; Hannis, Curtis; Lalani, Arif; Et al;
787 words
......some alarming attitudes about cost information. Here survey resultsand ideas providing better cost information for no decision-making. Nonprofits...Victoria, B.C., Canada, what kind of cost information they collected, how they used...
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Cost information valued
The Milwaukee Journal Sentinel;
July 17, 2003 ;
JOE MANNING;
412 words
...Cost information valued Employees want to know health...consumers to seek more health care cost information than in the past, according to...In the survey, consumers said cost information was more important than information...
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Leveraging Process Documentation for Time-Driven Activity Based Costing
Journal of Performance Management;
September 1, 2007 ;
Max, Mitchell;
787 words
......developing accurate and meaningful cost information - Time-Driven Activity-Based Costing...development of accurate and actionable cost information in a cost effective and timely manner...managed in a more accurate fashion. Cost information - even though expensive to produce...
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Boeing Subsidiary Pays U.S. $3.8 Million to Settle Dispute Over Three Navy...
U.S. Newswire;
December 29, 1992 ;
287 words
......to provide the government accurate cost information and did not perform tests as required...labor hours or provided inaccurate cost information to the government during negotiations...disclose to the government pricing and cost information in their possession when they negotiate...
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How Boeing tracks costs, A to Z. (includes related article)
Financial Executive;
November 1, 1994 ;
Bowlby, Robert J.;
787 words
......internal customers clamored for better cost information, the company decided to empower its...department they weren't getting the cost information they needed to manage airplane design...a few cost elements. Further, the cost information we provided individual managers didn...
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ABC Trends in the Banking Sector: A Practitioner's Perspective
Journal of Performance Management;
September 1, 2004 ;
Max, Mitchell;
787 words
......including banks - "have practically no cost information at all"'. Today, not only has ActivityBased...comprehensive and deep understanding of cost information as they strive to meet stakeholder...when presented in a transparent way, cost information forms a powerful tool in dialog ...
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ALASKA REGULATORY COMMISSION ISSUES ORDER ON COMPLAINT OF KAPP AGAINST...
US Fed News Service, Including US State News;
May 24, 2007 ;
787 words
......Summary We require the filing of avoided cost information and good faith negotiation of a power...Chugach has not provided the avoided cost information required by 3 AAC 50.770(e)(2) and...provide by June 4, 2007, the avoided cost information required by applicable state and ...
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Employees Want to Know Health Care Prices Ahead of Quality, Survey Says.
Knight Ridder/Tribune Business News;
July 17, 2003 ;
433 words
......consumers to seek more health care cost information than in the past, according to a survey...Group. In the survey, consumers said cost information was more important than information...surprised to find consumers valuing health cost information ahead of provider ...uality ...
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US FTC: Dell Computer and Micron Electronics settle FTC charges that ads...
M2 Presswire;
May 14, 1999 ;
787 words
......consumer leases by placing material cost information in inconspicuous or unreadable fine...importance of clearly disclosing essential cost information in ads, whether they are in print...failed to disclose adequately important cost information about the leases. Like Dell, Micron...
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Health group to disclose prices
The Milwaukee Journal Sentinel;
July 15, 2004 ;
JOE MANNING;
692 words
......for Healthcare Quality is to provide cost information on the normal delivery of a baby in...have been in the works to offer the cost information. "Saber-rattling gets people's attention...preliminary, Logan said, and eventually more cost information will appear on the Web site. ...
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Construction cost breakdown.
Buildings;
January 1, 1994 ;
212 words
......that a comprehensive compilation of construction-related cost information is an invaluable tool for assessing the merits of a proposed...overhead, and profit for the installing contractor. The cost information contained herein reflects the cost of materials and installation...
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Wisconsin hospitals, doctors organization to release price comparisons.
The Milwaukee Journal Sentinel (Milwaukee, Wisconsin) (via Knight-Ridder/Tribune Business News);
July 15, 2004 ;
727 words
......Healthcare Quality, plans to provide cost information on the normal delivery of a baby in...have been in the works to offer the cost information. Saber-rattling gets people's attention...preliminary, Logan said, and eventually more cost information will appear on the Web site. This...
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Costing traps for manufacturers
Manufacturing Engineering;
December 1, 1998 ;
Hicks, Douglas C;
787 words
......their current business. Cost information developed using these practices...and at worst misleading. Cost information is a critical element in...management decisions. Faulty cost information leads to bad decisions...
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Bid to drive out cowboy builders
Hull Daily Mail (UK);
October 6, 2006 ;
96 words
......builders. The Royal Institute of Chartered Surveyors' Building Cost Information Service has produced The Property Makeover Price Guide...blocked drains to fixing window panes. Joe Martin, Building Cost Information Service spokesman, said: "Knowledge is power and we expect...
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