Activity-based costing approach in the measurement of cost o

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Activity-based costing approach inthe measurement of cost of quality inSMEs: a case study

Serdar Özkan & Yasemin Zengin Karaibrahimo lu

a

a

Department of Business Administration , Izmir University ofEconomics , Turkey

Published online: 16 Aug 2012.

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TotalQualityManagement,2013

Vol.24,No.4,420–431,

/10.1080/14783363.2012.704286

Activity-basedcostingapproachinthemeasurementofcostofqualityinSMEs:acasestudy

¨zkanandYaseminZenginKaraibrahimog lu SerdarO

DepartmentofBusinessAdministration,IzmirUniversityofEconomics,Turkey

Sincethe1950s,aconsiderableamountofattentionhasbeengivenonthecostofquality(CoQ)intheoryandinpractice.Overall,itisarguedthataprecisemeasurementoftheCoQrequiresawell-establishedaccountingsystemthatprovidesaccuratecostinformation.However,intheliterature,itisgenerallyconsideredthattraditionalcostaccountingmethodsdonotprovideaccuratecostdataforthemeasurementofqualitycosts.Therefore,theaimofthisstudyistoexploretheroleofactivity-basedcosting(ABC)insupportingthemeasurementofCoQinsmallandmedium-sizedenterprisesinordertodiscusstheresultsofimplementation,itsbene tsanddrawbacks.Overall,itwasfoundthattheuseofABCintheCoQmeasurementprovidestheorganisationwiththemeanstodeterminebothvalue-addedandnon-value-addedquality-relatedactivitesandtodetectimprovementopportunitiesintheproductionprocess.

Keywords:costofquality;PAFscheme;activity-basedcosting;SMEs

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Introduction

Onewayofgainingacompetitiveadvantageintoday’schallengingbusinessenviron-mentistousequalityandcostasdifferentiatingfactors.Inordertoincreasecustomersatisfactionandthevalueoftheproducts/servicesdeliveredtothemarket,organisationsneedtobalancethequalityandcosts.Qualitycostsareconsiderablepartofacompany’stotalcosts(Giakatis,Enkawa,&Washitani,2001)andtheyareessentialfororganis-ationalperformance(Simga-Mugan&Erel,2000).Therefore,problemswithqualityarelikelytodamagebothcompetitivenessandreputationoforganisations.Kajdan(2007)indicatesthatorganisationsusedifferenttotalqualitymanagement(TQM)methods,suchaslabouranalysis,preventivequalitytoolsandeliminatingnon-value-added(NVA)activitiestoreducecostswithoutsacri cingquality.Costofquality(CoQ)isamongthosefundamentaltechniquesinTQM(Tsai,1998)andithasbecomeimportantfororganisations(Letza&Gadd,1994).CoQisusedasaprogressindicatorinmeasuringtheoverallperformanceoftheorganisations(Fassoula,2005),andifCoQisadequatelymeasuredandcontrolled,organisationsareabletogaincom-petitiveadvantage(Omurgonulsen,2009).Ingeneral,CoQisde nedasallresourcesemployedbyorganisationstoassurequalitystandards(Bohan&Horney,1991)andthusavoidlossesresultingfromfailure.

TherearetwostepsinCoQreporting:classi cationandmeasurement.Theclassi -cationofCoQdependsonthemodelsdeveloped,andmeasurementisresolvedbytra-ditionalcostaccountingvs.activity-basedcosting(ABC)methods.MeasuringCoQrequiresprecisecostinformationrecords.However,traditionalcostaccountingsystemsfailtoprovideaccuratecostinformationtomanagement(Yang,2008;Tsai,1998),

Correspondingauthor.Email:yasemin.zengin@ieu.edu.tr

#2013Taylor&Francis

TotalQualityManagement421

whichinturncausesadistortioninthemeasurementofCoQ.Oneofthereasonsforthede ciencyoftraditionalcostaccountingsystemsisthatthecost/expensecategorisationdoesnot twellwithCoQclassi cationmodels(Schiffauerova&Thomson,2006;Tsai,1998).Moreover,intraditionalcostaccounting,severalcostsareincorrectlyreported(Yang,2008)duetotheallocationoftheoverheadsusingasingledriverbasedonapre-determinedestimatedallocationrate.Traditionalcostallocationmethodsmaybesatisfac-torywhereoverheadallocationsarenotmaterial(Higgins&Young,2001).However,consideringthesigni canceofmanufacturingoverheadsinthecoststructureofcurrentproductionenvironments,itisimportanttousemoresophisticatedcostingmethodstoallo-cateoverheadsoverproducts/services.

Intheliterature,severalmodelshavebeendevelopedtoclassifyCoQ;theprevention–appraisal–failure(PAF)model(Feigenbaum,1956),conformanceandnon-conformancemodel(Crosby,1979),theopportunitycostmodel(Carr,1992),thetangible–intangiblemodel(Juran,Gryna,&Bingham,1975)andtheprocesscostmodel(Ross,1977).CoQclassi cationmodelsaremostlyactivity/processoriented(Schiffauerova&Thomson,2006).However,astraditionalcostaccountingdoesnotclassifycostelementsinaccord-ancewithactivity/processorientation,itcausesimprecisemeasurementofqualitycosts.

ABCwasdevelopedbyCooperandKaplan(1988)inordertoaccuratelyallocateover-headsandmitigatethedistortiononcostallocationandmeasurement,thusitisassumedtoovercometheshortcomingsoftraditionalcostaccounting(Higgins&Young,2001).Besidesitsapplicationincostaccounting,ABCisalsoproposedasasupportivecostingmethodinmeasuringCoQinqualitystudies(Schiffauerova&Thomson,2006).

Inthequalityliterature,studieshavebeenattemptedtomeasureCoQbothintheory(Weinstein,Vokurka,&Graman,2009;Schiffauerova&Thomson,2006;Freiesleben,2004;Tsai,1998;Feigenbaum,1956;Juran,1951)andinpractice(Fassoula,2005;Mukhopadhyay,2004;Krishnan,Agus,&Husain,2000;Simga-Mugan&Erel,2000;Keogh,Brown,&McGoldrick,1996;Carr,1992;Bohan&Horney,1991).Nevertheless,intheaccountingliterature,thereisaverylimitednumberofstudiesconcerningthemeasurementandreportingofCoQ(Williams,vanderWiele,&Dale,1999).Omurgonul-sen(2009)arguesthatonepossiblereasonforthisisthebeliefthatqualitycannotbemeasuredintermsofcost.Anotherimportantrea …… 此处隐藏：6272字，全部文档内容请下载后查看。喜欢就下载吧 ……