Homburg, C., Nasev, Julia and Plank, Philipp (2018). The impact of cost allocation errors on price and product-mix decisions. Rev. Quant. Financ. Account., 51 (2). S. 497 - 528. NEW YORK: SPRINGER. ISSN 1573-7179
Full text not available from this repository.Abstract
We use simulations to examine the impact of cost allocation errors on pricing and product-mix decisions. We compare the imperfect cost allocation of cost systems based on heuristics to the ideal cost allocation of a benchmark model. First, we find that more complex cost systems are associated with substantially lower profit errors. Second, we decompose the profit error and find that production quantity errors are larger than product portfolio errors indicating that reducing product portfolio errors is less critical in designing cost systems. We also document that overproduction errors are larger than underproduction errors and errors from keeping unprofitable products are larger than errors from dropping profitable products suggesting that cost systems tend to underestimate full costs. Third, we find that profit errors increase for more complex cost systems as resource sharing levels rise, which is an interesting counter intuitive result.
Item Type: | Journal Article | ||||||||||||||||
Creators: |
|
||||||||||||||||
URN: | urn:nbn:de:hbz:38-179082 | ||||||||||||||||
DOI: | 10.1007/s11156-017-0678-1 | ||||||||||||||||
Journal or Publication Title: | Rev. Quant. Financ. Account. | ||||||||||||||||
Volume: | 51 | ||||||||||||||||
Number: | 2 | ||||||||||||||||
Page Range: | S. 497 - 528 | ||||||||||||||||
Date: | 2018 | ||||||||||||||||
Publisher: | SPRINGER | ||||||||||||||||
Place of Publication: | NEW YORK | ||||||||||||||||
ISSN: | 1573-7179 | ||||||||||||||||
Language: | English | ||||||||||||||||
Faculty: | Unspecified | ||||||||||||||||
Divisions: | Unspecified | ||||||||||||||||
Subjects: | no entry | ||||||||||||||||
Uncontrolled Keywords: |
|
||||||||||||||||
Refereed: | Yes | ||||||||||||||||
URI: | http://kups.ub.uni-koeln.de/id/eprint/17908 |
Downloads
Downloads per month over past year
Altmetric
Export
Actions (login required)
View Item |