Strategic management accounting, coordination and long term cost structure : paper presented at the Annual Congress of the European Accounting Association, held in Graz, Austria, April 23-25, 1997

  • During the last years issues of strategic management accounting have received widespread attention in the accounting literature. Yet the conceptual foundation of most proposals is not clear. This paper presents a theoretical analysis of one of the most prominent approaches of strategic management accounting, i.e., Target Costing. First, the relationship between Target Costing and Life-Cycle-Costing is shown. Secondly, a model based on a mechanism-design-approach is used to answer the question of whether the „Market-into-Company“-method of Target Costing can somehow be endogenized. The model captures problems of asymmetric information, price policy and cost structures (i.e. learning effects etc.). The analysis shows that the more „strategic“ is the firm´s cost function, the less valid is „strategic“ management accounting in terms of the usual way Target Costing is employed.

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Author:Ralf Ewert, Christian Ernst
Parent Title (German):Universität Frankfurt am Main. Fachbereich Wirtschaftswissenschaften: [Working paper series / Finance and accounting] Working paper series, Finance & Accounting ; No. 2
Series (Serial Number):Working paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting (2)
Publisher:Johann-Wolfgang-Goethe-Universität, Frankfurt am Main, Fachbereich Wirtschaftswissenschaften
Place of publication:Frankfurt am Main
Document Type:Working Paper
Year of Completion:1997
Year of first Publication:1997
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2020/08/31
Tag:Asymmetric Information; Coordination; Learning Effects; Managerial Accounting; Target Costing
Page Number:42
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht