Mediation Effect Of Tqm Technical Factors In Excellence Management Systems Essay


Research each term using the DWC Virtual Library and sources from the recommended readings.
Explain how each term is used by managerial accountants in the business environment. Provide an example in your own words for each definition.


Definitions and Examples:

1) Activity-Based Costing

Activity-Based Costing is considered as the methodology of costing, which helps in recognising the activities of the organisation and allocated specific cost for each of the activities.


Figure 1: Example of Activity-based Costing

(Source: Zhang, Hoque & Isa, 2015)

2) Balanced Scorecard

The balance score card is associated with the management and strategic planning system, which is extensively used in the industry or business government, especially, in the non-profit organisation.


Some of the factors are associated in presenting the examples of Balance Scorecard. These factors are Finance, learning and growth, internal business process, and customer.

3) Certified Management Accountant

Certified Management Accountant is a designation provided to a specific person who demonstrates the assimilations of mixed expertise and financial accounting to add value to the strategic management process.


The certified accountant who helps in the decision making process regarding the financial aspects of the organisation.

4) Continuous Improvement

The continuous improvement is considered as an ongoing process for improving the process, products, or services of an organisation.


The continuous improvement can be two types, for instance, ‘incremental improvement’ and ‘breakthrough improvement’.

5) Cost-Benefit Analysis

The ‘cost-benefit analysis’ is a process undertaken for analysing the business decisions.


The cost-benefit analysis process can be associated in time of undertaking the relevant cost related actions to add value to the business profitability.

6) Cost Drivers

Cost drivers’ is taken into account as a factor that contributes the expenses of business operations.


Figure 2: Examples of Cost Drivers and Variability

(Source: Rothaermel, 2015)

7) Cost of Goods Manufactured

The term refers to the costs that are needed to be invested while manufacturing of the goods or services.


The costs involved in the manufacturing process are specifying the costs of labour, raw materials, delivery charges, packaging, and machinery costs.

8) Cost of Goods Sold

COGS is facilitating the direct selling of the goods by an organisation.


Figure 3: Example of COGS

(Source: Fan & Liu, 2015)

9) Direct Costs

The direct costs are referring the costs involved with the expenses of materials, labour charges, and other process of the production house.


The direct labour charge, commissions of the materials, manufacturing supplies, and piece rate wages are the direct costs.

10) Direct Labour

The labour associated in the maintenance, administrative, and other service departments are termed as Direct Labour


People who are manufacturing the foods or services and maintaining the activities of the organisations are considered as the direct labour of an organisation.

11) Fixed Costs

The constant and fixed costs involved in the company’s production are considered as the fixed costs


Examples are the rents, loan payments, and insurance premium.

12) Indirect Costs

The costs that are not directly attached to the accounting factors for any project or activity are termed as “indirect Costs”.


Costs of the project, functions, facility or products

13) Indirect Labour

“Indirect labours” are specifying the spent hours on any particular activity or project, which has not been traced previously.


Purchasing staff, Production Supervisor

14) Just-in-Time (JIT) Production System

The strategy is mainly used in increasing the efficiency and decreasing the amount of wastages by receiving the quality amount of goods as per the requirements.


Figure 4: Example of JIT production

(Source: Chen & Sarker, 2015)

15) Opportunity Costs

Opportunity cost is determining the alternatives during the time of selecting any alternative.


Figure 5: Example of Opportunity Costs

(Source: Garcia?€ђCastro & Aguilera, 2015)

16) Period Costs

The period costs are associated with the selling functionalities of the business by determining the administrative purposes.


Selling expenses, depreciation expense, advertising expenses

17) Product Cost

The product cost is generating the idea of the costs associated during the manufacturing of any product.


Raw materials, factory depreciation, labour charge

18) Sunk Cost

Sunk Costs are referring to the costs that have been incurred and cannot recover.


Future costs, prospective costs

19) Total Quality Management (TQM)

The approach of the management in determining the long-term success through achieving the customer satisfaction is considered as ‘Total Quality Management’.


Figure 6: Example of TQM

(Source: Calvo-Mora et al. 2014)

20) Variable Costs

The costs involved in the production volume are considered as variable costs.


Direct Materials, Commissions, Piece rate Labour


Calvo-Mora, A., Ruiz-Moreno, C., Pic?n-Berjoyo, A., & Cauzo-Bottala, L. (2014). Mediation effect of TQM technical factors in excellence management systems. Journal of Business Research, 67(5), 769-774.

Chen, Z., & Sarker, B. R. (2015). Optimisation of multi-stage JIT production-pricing decision: centralised and decentralised models and algorithms.International Journal of Production Research, 53(20), 6210-6230.

Fan, Y., & Liu, X. K. (2015). Misclassifying Core Expenses as Special Items: Cost of Goods Sold or Selling, General, and Administrative Expenses?. Contemporary Accounting Research, Forthcoming.

Garcia?€ђCastro, R., & Aguilera, R. V. (2015). Incremental value creation and appropriation in a world with multiple stakeholders. Strategic Management Journal, 36(1), 137-147.

Rothaermel, F. T. (2015). Strategic management. McGraw-Hill.

Zhang, Y. F., Hoque, Z., & Isa, C. R. (2015). The Effects of Organizational Culture and Structure on the Success of Activity-Based Costing Implementation. In Advances in Management Accounting (pp. 229-257). Emerald Group Publishing Limited.

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