Focusses on the use of target costing for new product development. This approach concentrates on determining costs for a product during the planning and design stage. Also describes the use of cross‐functional teams made up of industrial marketers, cost accountants and others critical to the design and manufacturing decisions required for determining the price and features with which a product is most likely to appeal to potential buyers. After deducting the desired profit margin from the projected selling price, planners develop estimates of each product element that make up a product′s costs for design, manufacturing, sales and marketing. Further analysis is carried out to identify and estimate the cost of each component that makes up the finished product. Stresses the critical role that management accountants and other members of an organization can play in the design and manufacture of a new product at a specified price.

No abstract

The balanced scorecard (BSC), developed by Kaplan and Norton (1992), allows an organization to translate its strategy and objectives into a series of performance measures. A recent study by Lipe and Salterio (2000) found that subjects use common scorecard measures in performance evaluation but disregard unique measures. This study finds that both common and unique scorecard measures are used in performance evaluation.

Traditional accounting systems have failed to match revenues and expenses properly in today's JIT purchasing environment. An alternative approach is discussed—one that utilizes activity‐based costing, which helps accurately measure overhead costs for a basis of cost allocation. Suggestions are offered for designing and utilizing an activity‐based approach to produce true measures of product cost.

This paper investigates the association of stock prices and cash flows, using both the traditional cash flow definition and the SFAS 95 definition. The study finds that the traditional cash flow measure is more highly correlated with stock price changes for large firms than is the SFAS 95 measure and that neither definition of cash flow is significantly correlated with stock price changes for the small firm sample