An assessment of existing cost systems and appropriateness of activity based costing for Turkish and UK paper industries
This thesis examines costing systems adopted within Turkish and British paper industries and assesses the appropriateness of Activity Based Costing for this area. It includes two case studies, one of which was performed in a Turkish paper mill and the other in a British one, that describe and examine product costing methods adopted and cost drivers employed within the costing system. The study also contains the results of two questionnaire surveys, one of which was applied to the Turkish and the other to British paper industry. All paper mills in the two industries were included within the survey response rates of which are 65.2% and 40.25% of the Turkish and British mills respectively. The questionnaire survey was designed to shed light into the costing practices adopted within the two paper industries. The results of the case studies and surveys indicated that the existing costing methods adopted and cost drivers employed within the two industries were appropriate for their manufacturing environments. Almost all the mills surveyed were found using traditional methods for their product costing and decision-making needs. Although ABC was implemented by a small number of factories, it was found inappropriate by two mills (one Turkish and one British) and hence abandoned. Different production processes and product types were identified as the main reason of this unsuitability. Also, most non-volume-related activities that may produce cost distortion in electronic and machinery-parts industries either do not exist or the effect of which over products is not important in the paper industry. Machine hour and production tonne cost drivers were found as being employed generally in both paper industries studied.