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Business Productivity Measurement Using Standard Cost Accounting Information

Business Productivity Measurement Using Standard Cost Accounting Information The measurement of productivity has been a problem area for manyyears because of the difficulties inherent in precisely defining andquantifying all the outputs and inputs which constitute the productivityequation. A productivity measurement technique is presented whichfocuses on the business aspects of an organisations performance, usingstandard cost accounting information, so providing an effective systemto measure the productivity of an organisation and its departments. Thetechnique is simple and flexible, and does not require the collection ofadditional information. It is based on the standard total productivitymodel where Productivity Output divided by Input, and develops fromthis model a simple formula for calculating overall organisationalproductivity, as well as a differential approach which relatesdepartmental productivity variances to standard cost and volumevariances. Critical factors in the approach are the use of businessgoals, and the determination of effective output measures. Thisbusiness productivity concept is considered to have manybenefits over other productivity accounting approaches because itprovides a great deal of information vital to effective managementdecision making. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Operations & Production Management Emerald Publishing

Business Productivity Measurement Using Standard Cost Accounting Information

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0144-3577
DOI
10.1108/01443579010142243
Publisher site
See Article on Publisher Site

Abstract

The measurement of productivity has been a problem area for manyyears because of the difficulties inherent in precisely defining andquantifying all the outputs and inputs which constitute the productivityequation. A productivity measurement technique is presented whichfocuses on the business aspects of an organisations performance, usingstandard cost accounting information, so providing an effective systemto measure the productivity of an organisation and its departments. Thetechnique is simple and flexible, and does not require the collection ofadditional information. It is based on the standard total productivitymodel where Productivity Output divided by Input, and develops fromthis model a simple formula for calculating overall organisationalproductivity, as well as a differential approach which relatesdepartmental productivity variances to standard cost and volumevariances. Critical factors in the approach are the use of businessgoals, and the determination of effective output measures. Thisbusiness productivity concept is considered to have manybenefits over other productivity accounting approaches because itprovides a great deal of information vital to effective managementdecision making.

Journal

International Journal of Operations & Production ManagementEmerald Publishing

Published: Aug 1, 1990

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