The importance of the calculation methods based on direct costing in managerial decisions
AbstractIn response to the criticisms of the cost centre accounting, the calculation methods based on the direct costing concept no longer use the arbitrary calculations for the allocation of indirect expenses based on less pertinent allocation keys. Indirect costs create the illusion of a relation between costs and products, and inexact complete costs lead to an inadequate evaluation of the circulating assets, thus leading to the distortion of the accounting results. The usage of complete costs as forecast norms proves to be delicate. The costs obtained by using the Direct Costing methods are closer to the current cash flow structure, allowing for decisions to be made on short term, in the context of certain given capacities and production procedures.
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Bibliographic InfoArticle provided by University of Pitesti in its journal Scientific Bulletin - Economic Sciences.
Volume (Year): (2010)
Issue (Month): 9 ()
direct costs; decisions; calculation;
Find related papers by JEL classification:
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
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