Open AccessThe Determinants of Adding Non-Production Costs When Calculating Product Costs: Evidence from the Saudi Industrial Sector
Author(s) -
Abdulrahman Aljabr
Publication year - 2022
Publication title -
asian economic and financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.215
H-Index - 10
eISSN - 2305-2147
pISSN - 2222-6737
DOI - 10.18488/5002.v12i2.4414
Subject(s) - production (economics) , product (mathematics) , quality (philosophy) , total cost , quality costs , cost driver , cost estimate , process (computing) , computer science , production cost , operations management , business , operations research , risk analysis (engineering) , environmental economics , economics , microeconomics , marketing , engineering , mathematics , cost control , mechanical engineering , philosophy , geometry , management , epistemology , operating system
The quality of decision making and the level of performance are greatly affected by the accuracy of both production and non-production costs. While both components are important in increasing the accuracy of product costs in decision making, research into the inclusion of non-production costs is limited. Therefore, this research aims to examine the determinants of the addition of non-production costs when calculating product costs for use in decision making. This research utilized a questionnaire survey strategy to collect data from Saudi industrial operating units. The results of this research show that the level of cost data importance and its usage in decision making has no effect on adding non-production costs when calculating product costs, while the level of cost system complexity does. The results also add to the cost system design literature with regard to the addition of non-production costs when calculating product costs in the decision-making process.