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Development of real-time product cost measurement: A case study in a medium-sized manufacturing company


  • Wouters, Marc
  • Stecher, Julia


Data availability and the need for updating are important considerations when designing product costing systems. This paper describes the development of a costing system in a medium sized company to better understand these issues. The company wanted to be able to assess profitability of products on a more comprehensive basis than the contribution margins of products, which included merely the direct material costs. The resulting system uses practical capacity to compute rates and is based on a hybrid of machining and labor times. The most innovative aspect is the use of real-time data on machine times in manufacturing, in the context of a large number and frequently changing products. The study also helps to better understand the limitations of time-driven activity-based costing (TDABC), and it highlights the role of “data discovery” for the design of costing systems.

Suggested Citation

  • Wouters, Marc & Stecher, Julia, 2017. "Development of real-time product cost measurement: A case study in a medium-sized manufacturing company," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 235-244.
  • Handle: RePEc:eee:proeco:v:183:y:2017:i:pa:p:235-244
    DOI: 10.1016/j.ijpe.2016.10.018

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    References listed on IDEAS

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