Abstract
Manufacturing firms with standard costing systems use accounting cost variance heuristics to measure the expost performance of the organization and control costs. This article shows that if the underlying technology of the firm is semi-translog then the data provided by a standard costing system can also be used to compute economic performance indices, such as Malmquist and Konus indices, without incurring additional information costs. These indices can be used either in place of or in conjunction with accounting variances to help control the costs of the organization by allocating responsibility over these indices to those managers who (partially) control them.
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The refereeing process of this paper was handled through S. Hackman.
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Callen, J.L. Efficiency measurement in the manufacturing firm. J Prod Anal 2, 5–13 (1990). https://doi.org/10.1007/BF00158705
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DOI: https://doi.org/10.1007/BF00158705