I need a Critical Analysis of Article Optimal decision making using cost accounting information.

Abstract:

The primary objective of this paper was to compare the results of using four

di. erent cost accounting systems (traditional cost accounting, activity-based costing,

direct costing, and throughput accounting) in a resource-constrained production

environment in order to make two categories of decisions that managers

frequently use cost accounting information to make. The research design includes

a survey of manufacturing managers to determine what decisions cost accounting

information is used to make, and a simulation model to determine the results of

the decisions. In addition, the results of the four cost accounting models are

compared with a linear programming solution. The study found that the throughput

accounting model in all cases made the same decision as the linear programming

model, but the other three cost accounting systems generally produced

suboptimal results. Our conclusion is that for a cost accounting system to provide

information for optimal decisions, it must (1) be aware of production constraints,

and (2) not use allocated costs.