Indian Journal of Science and Technology
Year: 2016, Volume: 9, Issue: 14, Pages: 1-9
E. S. Zambrzhitskaia, N. Ye Ivanova, V. G. Ivanov, I. V. Kobeleva* and Ya. D. Balbarin
Department of Accounting and Economic Analysis, Institute of Economics and Management, FSBEE HVE Magnitogorsk State Technical University named after G.I. Nosov, Magnitogorsk, Russia; [email protected], [email protected], [email protected], [email protected]
*Author of Corresponding: I. V. Kobeleva Department of Accounting and Economic Analysis, Institute of Economics and Management, FSBEE HVE Magnitogorsk State Technical University named after G.I. Nosov, Magnitogorsk, Russia; [email protected]
Background: One of the most effective management tools is a calculation of the total cost of products, works and services, which, as part of the fuel and energy complex, is complicated by the presence of multi-stage production processes, and is currently carried out at most business entities in a simplified manner with the exception of some cause-and-effect relationships. Methods: In the present study different results of calculations of the total cost of products and semi-finished products using both existing and the proposed approaches to the problem are simulated. The analysis of the problem relating to the distribution of indirect expenses at Central Heating and Power Plant (CHPP) of cogeneration type is given; the advantages and disadvantages of the most common current traditional approach to the allocation of costs are revealed; the mathematical model of indirect costs distribution is proposed based on back-directed technological ties. Findings: The traditional approach to cost allocation and full cost formation is unable to determine the above index in case of material counter-flows, which is a characteristic feature of complex technological networks in organizations and for the interaction within groups of companies (holding companies). This disadvantage is excluded in the proposed by the authors approach based on the use of mathematical apparatus of matrix algebra, which is more consistent with modern information technologies used in the practice of organizations (the concept of ‘Spreadsheet’), and which, ultimately, will enable to introduce painlessly the proposed method of full cost evaluation in practice. Improvements: The proposed model and methods of its use allow improving the indirect cost allocation mechanism in the process of calculating the total product cost of CHPP.
Keywords: Cogeneration, Indirect Costs, Management Decisions, Matrix Modeling, Responsibility Center, Total Cost
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