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The importance of the calculation methods based on direct costing in managerial decisions


  • Victoria FIRESCU

    () (University of Pitesti, Faculty of Economic Sciences)


In 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.

Suggested Citation

  • Victoria FIRESCU, 2010. "The importance of the calculation methods based on direct costing in managerial decisions," Scientific Bulletin - Economic Sciences, University of Pitesti, issue 9, pages 75-82.
  • Handle: RePEc:pts:journl:y:2010:i:1:p:75-82

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    direct costs; decisions; calculation;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity


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