1、中文2958字，1845单词 1 A FIELD STUDY:SMALL MANUFACTURING COMPANIES In this section, the implementation of the proposed Integrated ABC-EVA System at two small manufacturing companies is presented. The managers of the companies wished for their company names to remain anonymous. Therefore, they will be refe
2、rred to as “Company X” and “Company Y” from here on. Prior to the field study, both companies were using traditional costing systems. The overhead was allocated to product lines based on direct labor hours. In both companies, managers felt that their traditional costing systems were not able to prov
3、ide reliable cost information. 1 Company X Company X, located in Pittsburgh, Pennsylvania, was a small manufacturing company with approximately 30 employees. Company Xs main products lines were Overlays、 Membranes、 Laser、 Roll Labels and NCaps. In the mid 1990s, a group of investors purchased
4、the company from the previous owner-manager who had retired. At the time of the study, the company was managed by its former vice-president, who was supported by a three-person management group. Investors were primarily concerned with financial performance rather than daily decision-making. The mana
5、gement group was very eager to participate in the field study for two reasons. First, the management was under pressure from their new investors who were not satisfied with the current return from existing product lines； Second, management was trying to identify the most lucrative product line in or
6、der to initiate a marketing campaign with the biggest impact on overall profits. 2 Company Y Company Y, also located in Pittsburgh, Pennsylvania, was owned and managed by three owner-managers who bought the company from a large corporation in the mid 1990s, Company Y employed approximat
7、ely 40 people. The majority of this companys business was in the area of manufacturing electrical devices and their main product lines were Motors and Motor Parts、Breakers、 and Control Parts. Company Y sold its products in the domestic market as well as abroad. A portion of the companys output
8、 was sold directly to end-users, while the remainder was sold with the help of independent distributors. The management of Company Y was 2 interested in using the Integrated ABC-EVA System for the purpose of cost control and profit planning. 3 Comparison of the costing systems During the field
9、 study, three costing systems (TCA, ABC and the Integrated ABC-EVA System) were used to obtain cost information for each company in order to identify factors which may lead to distortions through arbitrary allocation of capital costs. In a comparison, capital costs were only able to be traced by the
10、 Integrated ABC-EVA System. The nature of the TCA and ABC systems resulted in arbitrary allocations of capital costs. 4 RESULTS The main objective of the data analysis presented in this section is to investigate which factors most often distort information provided by the ABC system. As mentioned in
11、 the methodology section, factors such as diversity in production volume、 product size、 product complexity、 material consumption, and setups often distort cost information. These factors are examined closely for possible allocation errors. 4.1 Data Analysis for Company X The data analysis for
12、Company X began with an examination of its cost structure. Company Xs overall costs for 1998 were evaluated by comparing the percentages of direct costs (direct labor and direct material)、 operating costs (overhead) and capital costs as shown in Exhibit 1. &
13、nbsp; Exhibit 1. Cost Analysis for Company X in Thousands of Dollars Direct Cost Operating Cost Capital Cost Total Cost 1664 829 326 2819 59.0% 29.4% 11.6% 100.0% Capital costs, at 11.6 percent, represented a notable portion of Company Xs t
14、otal costs. This relatively high capital costs could be explained by high investments in special equipment and fixed assets. In addition, Company X required a relatively large amount of working capital to support its wide variety of products. The next step was to calculate product cost information a
15、nd examine changes across six product lines and three costing systems. Exhibit 2 and Exhibit 3 present the results. Exhibit 2. Product Cost Information in Thousands of Dollars 3 Product Line
16、TCA ABC ABC-EVA Overlays Membrane Laser 1201 621 438 1043 681 415 1216 747 482 Roll Labels NCaps Miscellaneous Parts 134 52 47 179 103 72 189 108 77 Total 2493 2493 2819 Exhibit 3. Changes in Product Cost Information after Including Capital Costs Product Line TCA to ABC-and-EVA ABC to ABC-EVA Overla
17、ys Membrane Laser + 1.2 % + 20.3 % + 10.5 % + 16.6 % + 9.7 % + 16.1 % Roll Labels NCaps Miscellaneous Parts + 41.0 % + 107.7 % + 63.8 % + 5.6 % + 4.9 % + 6.9 % Total + 13.1 % + 13.1 % The Integrated ABC-EVA System, taking into account capital costs, revealed that the overall product cost was actuall
18、y 13.1 percent higher than either TCA or ABC estimated. The difference in product cost, however, was not uniform across all product lines. After adding capital costs to the product cost obtained from the ABC system, the greatest difference in product cost was observed in the Overlays product line (+
19、 16.6 %) while the least difference was registered in the NCaps product line (+ 4.9 %). From this, it can be concluded that an arbitrary allocation of capital costs to the product cost obtained by using the ABC system would produce inexact product cost information. For example, adding 13.1 percent t
20、o all product lines would distort the product costs for Company X. Company Xs management was surprised when presented with the results of using the Integrated ABC-EVA System. Familiarized with the calculations used, the managers agreed that the results were correct. Knowing that the Overlays product
21、 line was the only product line which created economic value, they considered extending marketing efforts for this product line. In contrast, for the Laser product line (considered to be profitable according to the TCA and ABC systems, but revealed to be destructive to shareholder value by the Integrated ABC-EVA System), the managers announced changes in their pricing policies, as well as additional cost reduction efforts. Furthermore, they considered new outsourcing policies for unprofitable low volume product lines (such as NCaps and Miscellaneous Parts).
