Point of Contact: Kai Mertens
Product costs have already been used for facilitating decision-making for a long time and several opportunities such as activity-based costing (ABC), time-driven activity-based (TDABC) and traditional volume-based costing systems (TC) have arisen. The origin of their necessity depends on estimating costs of capacity resources to products, aiming at providing a reliable proxy for the usage of individual product resources. In this line their efficient computation may play a vital role for gaining a competitive advantage. However, emerging fluctuations and complexity in firms’ production systems are impeding the estimation, whereby calculating ‘true’ product costs appears as too costly or simply infeasible. Therefore, we aim to explore the cost-benefit trade-off to provide managerial implications of how to compute product costs. In using analytical-numerical models, which are a useful tool in management accounting to examine product costing, it is possible to trace causes of errors and perform comparative assessments in context of many different production.