Management Accounting in Activity Networks
Modern management accounting information systems trace cost to a greater level of detail than did their predecessors. Nonetheless, the basic ingredient of accounting information continues to be the measurable transaction, actual or budgeted, rather than the more subjective concepts of marginal cost or opportunity cost favored by economic theory. This paper studies the design of a management accounting information system that is constrained to use messages consisting of actual or proposed transactions, or reports compiled exclusively from such messages. The firm is modeled as a network of productive activities, some of which produce revenue while others produce goods or services used by other activities. The firm seeks a budget, that is, a proposed action for each activity, that maximizes profit. An accounting information system includes a performance measure for each activity, and each activity manager is assumed to act to maximise measured performance. Several accounting information systems are constructed and compared according to the profitability of the budgets they generate. Although accounting information is not sufficient to ensure profit-maximisation, activity-based costing (ABC) is shown to be useful in identifying products that should be dropped and internally produced inputs that should be purchased from external sources. An extension of ABC that includes a measure of internal opportunity cost is constructed and shown to be useful in allocating internally produced inputs.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||Oct 1999|
|Date of revision:|
|Contact details of provider:|| Postal: School of Economics and Finance, University of St. Andrews, Fife KY16 9AL|
Phone: 01334 462420
Fax: 01334 462438
Web page: http://crieff.wordpress.com/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:san:crieff:9912. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (the School of Economics)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.