The Determinants of Adding Non-Production Costs When Calculating Product Costs: Evidence from the Saudi Industrial Sector

The quality of decision making and the level of performance are greatly affected by the accuracy of both production and non-production costs. While both components are important in increasing the accuracy of product costs in decision making, research into the inclusion of non-production costs is limited. Therefore, this research aims to examine the determinants of the addition of non-production costs when calculating product costs for use in decision making. This research utilized a questionnaire survey strategy to collect data from Saudi industrial operating units. The results of this research show that the level of cost data importance and its usage in decision making has no effect on adding non-production costs when calculating product costs, while the level of cost system complexity does. The results also add to the cost system design literature with regard to the addition of non-production costs when calculating product costs in the decision-making process.