Chalmers Conferences, The 6th Swedish Production Symposium

DIFFERENTIATED MANUFACTURING COST ALLOCATION APPROACHES WITH RESPECT TO PRODUCTION PROCESS TYPES
Andreas Myrelid, Jan Olhager

Last modified: 2014-11-24

Abstract


We investigate the problem of fitting appropriate cost allocation methods to different production process types. We analyse and compare the combinations of three product costing methods versus three process types using quantitative modelling. Real data from an advanced manufacturing technology firm are used to illustrate the effects of using different types of cost allocation schemes for different processes. We propose a hybrid approach that selects the right product costing approach for each production process type. Such a hybrid approach is particularly useful in plants with different types of production processes.


Keywords


Case application, lean accounting, throughput accounting

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