Science lost,science found in the post WWII Austrian economics movement: The case of Emil Kauder

The Review of Austrian Economics - In studies of the Austrian School of Economics, Emil Kauder frequently gets lost in the shuffle. This article reconstructs his intellectual biography. His...     

Cost Management in Sri Lanka: A Case Study on Volume,Activity and Time as Cost Drivers

Despite its theoretical superiority, the activity-based costing (ABC) model has had only moderate success in replacing the traditional volume-based absorption costing models in complex organizations worldwide. Even in organizations that have launched ABC projects, the implementations often do not sustain. In response to this general lack of enthusiasm worldwide for ABC, accountants developed the time-driven activity-based costing (TDABC) model as an alternative cost allocation model. This paper presents a comparison of the TDABC model with ABC, and considers if this alternative cost allocation model (1) is easier to implement from an international perspective and (2) provides comparable cost information for decision making. We use a case study in a country outside the model's country of origin to understand the similarities and differences in absorption costing systems that use ‘volume,’ ‘activities,’ and ‘time’ as the drivers of indirect cost allocations. We also use the case study to ascertain if any country‐specific factors impede ABC implementation. We conclude the following: the TDABC model has similar implementation complexities to ABC if modelling conditions are strictly adhered to; these complexities are independent of country‐specific factors; and in its simplest form, the model generates the same decision information errors of traditional costing.     

Teaching note: Traditional and activity based costing systems

A significant portion of the current managerial accounting literature contrasts the benefits and importance of activity based costing (ABC) systems with the more traditional cost accounting systems. This paper questions this tendency of making such a stark contrast, by placing ABC systems within a wider cost accounting framework. Initially, the framework is developed by providing an overview of the product costing, control and decision making process. Also outlined are the various costing systems in terms of their objectives, advantages and deficiencies. A schema for integrating the costing process with decision making and performance evaluation criteria is then conceptualized. The role of ABC is recognized and integrated within this framework. The link between ‘traditional’ and ABC systems is also studied via an analysis of the conventional wisdom in some of the leading texts in managerial accounting. The analysis demonstrates that there is still much ambiguity in both the contrasting and the linking of ABC with the more traditional costing systems.     

The Application of Management Accounting Techniques to Marketing

This paper examines the accounting techniques presently used to assist decision making and control within the marketing function of companies that operate in a highly competitive industry. The overall observation is that, while the use of these techniques is greater than in earlier studies conducted in less competitive industries, only a handful of management accounting techniques considered superior by the conventional wisdom have found their way into regular usage. No evidence was found to indicate that better performing firms employ these techniques on a more regular basis.     

Transparent Costing: Has the emperor got clothes?

Transparent Costing (TC) is a framework for determining the full indirect costs and thereby the full costs (FC) of Australian Competitive Grant (ACG) research projects; with the objective of ensuring the full funding of these projects by the government, so that they could be sustained in the long-run, and preventing their cross-subsidisation from other revenue sources. If a university wishes to be fully funded for its AGC research projects, it is mandatory to undertake a TC exercise and allocate the indirect costs of research activities. It was found in this study that whilst the objectives of FC appear worthwhile, FC may not prevent the practice of cross subsidisation. Also whilst it was found that Time-Driven Activity-Based Costing (TDABC) is preferable to ABC in the TC modelling of ‘research only’ departments and institutes; both approaches do not provide accurate information in ‘teaching and research’ departments. In these departments more accurate estimations could be obtained from studying the workload allocation methods and conducting direct interviews of the staff undertaking research on ACG and other externally funded grants.     

An ex-ante approach to brand capability valuation

There are numerous financial metrics available in the academic and commercial world to estimate brand value. In the context of mergers and acquisitions, managers often use such metrics when purchasing or selling brands. However, the measurement of brand equity in a going-concern has received scant attention in the academic literature. The well-known Interbrand™ approach is an ex-post calculation of brand value. This paper extends Interbrand's brand strength valuation model by developing an ex-ante approach to guide managers in their budgeting and strategic decision-making processes geared towards building brand value. It then empirically tests the model in a company with an internationally recognized brand.