Reading A
Cooper, R. and Kaplan, R. S. (1988). How cost accounting distorts product costs.Management
Accounting(April), 20 – 27. Reproduced by permission of Copyright Clearance Center,
Inc.
Questions
1 What are the criticisms that Cooper and Kaplan make about variable costs and
why do they claim that marginal costing has failed?
2 Cooper and Kaplan argue that fixed cost allocations are faulty and that the ‘cost
of complexity’ requires a more comprehensive breakdown of costs. How do
they propose that such a breakdown takes place?
3 How can the product cost system proposed by Cooper and Kaplan be strategi-
cally valuable to an organization that adopts it?Further reading
Brignall, S. (1997). A contingent rationale for cost system design in services.Management
Accounting Research, 8, 325 – 46.
Kaplan, R. S. (1994). Management accounting (1984 – 1994): Development of new practice
and theory.Management Accounting Research, 5, 247 – 60.
Kaplan, R. S. and Cooper, R. (1998).Cost and Effect: Using Integrated Cost Systems to Drive
Profitability and Performance. Boston, MA: Harvard Business School Press.
Mitchell, F. (1994). A commentary on the applications of activity-based costing.Management
Accounting Research, 5, 261 – 77.
Turney, P. B. B. and Anderson, B. (1989). Accounting for continuous improvement.Sloan
Management Review,Winter, 37 – 47.