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Management control systems
Strategic management accounting
8.1 Manufacturing methods
TRADITIONAL
Standardisation of product Globalisation
Long production runs Competition
‘Acceptable’ level of quality JIT and TQM
Slow product development ‘Intelligent machines’
8.2 Modern management accounting techniques
TECHNIQUE
JIT and TQM environments Throughput accounting
Back flush accounting
Costs of quality
Non-financial performance indicators
Large overhead costs Activity based costing (ABC)
Activity based budgeting (ABB)
Focus on longer-term strategic Non-financial performance indicators
issues
Balanced scorecard
Strategic management accounting (SMA)
More on costs of quality
Conformance costs are those incurred in ensuring that a failure of quality is
avoided. They are divided into prevention costs that are spent ensuring defects do
not occur and appraisal costs connected with measuring that conformity.
Non-conformance costs are the costs of quality failure. They are divided into the
costs incurred when a failure occurs but is prevented from affecting the customer
(internal failure) and costs incurred when a customer is affected (external failure).
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