Making better decisions by applying mathematical optimization to cost accounting: An advanced approach to multi-level contribution margin accounting.

ABSTRACT: The purpose of multi-level contribution margin accounting in cost accounting is to analyze the profitability of products and organizational entities with appropriate allocation of fixed costs and to provide relevant information for short-term, medium- and longer-term decisions. However, the conventional framework of multi-level contribution margin accounting does not usually incorporate a mathematical optimization method that simultaneously integrates variable and fixed costs to determine the best possible product mix within hierarchically structured organizations. This may be surprising in that operations research provides an optimization model in the form of the fixed-charge problem (FCP) that takes into account not only variable costs but also fixed costs of the activities to be planned

SUBMITTER: Gutierrez M 

PROVIDER: S-EPMC7905367 | biostudies-literature | 2021 Feb

REPOSITORIES: biostudies-literature