【正文】 were then pared in order to reach a conclusion about the value of the Integrated ABCEVA System for manufacturing panies in general. The more specific objective of the data analysis was to investigate which factors may distort information provided by the TCA or ABC system when capital costs are not allocated or are allocated arbitrarily. Because factors such as diversity in production volume、 product size、 product plexity、 material and setups often tend to distort cost information (Cooper, 1988), these factors are examined closely for possible capital allocation distortions. By tracing operating costs to cost objects, the ABC system has the ability to eliminate many of these distortions by using multiple (operating) cost drivers. However, because the ABC system does not take into account capital costs, it can be assumed that an arbitrary capital costs allocation may allow other distortions to occur. In addition, it can be assumed that since the standard ABC cost analysis only considers direct and operating costs, the managers who are forced to make their decisions based on operating profits alone, or who try to somehow arbitrarily allocate capital charges to cost objects will sometimes make wrong decisions. A FIELD STUDY:SMALL MANUFACTURING COMPANIES In this section, the implementation of the proposed Integrated ABCEVA System at two small manufacturing panies is presented. The managers of the panies wished for their pany names to remain anonymous. Therefore, they will be referred to as 4 “Company X” and “Company Y” from here on. Prior to the field study, both panies were using traditional costing systems. The overhead was allocated to product lines based on direct labor hours. In both panies, managers felt that their traditional costing systems were not able to provide reliable cost information. 1 Company X Company X, located in Pittsburgh, Pennsylvania, was a small manufacturing pany with approximately 30 employees. Company X’s main products lines were Overlays、Membranes、 Laser、 Roll Labels and N’Caps. In the mid 1990’s, a group of investors purchased the pany from the previous ownermanager who had retired. At the time of the study, the pany was managed by its former vicepresident, who was supported by a threeperson management group. Investors were primarily concerned with financial performance rather than daily decisionmaking. The management group was very eager to participate in the field study for two reasons. First, the management was under pressure from their new investors who were not satisfied with the current return from existing product lines。 Second, management was trying to identify the most lucrative product line in order to initiate a marketing campaign with the biggest impact on overall profits. 2 Company Y Company Y, also located in Pittsburgh, Pennsylvania, was owned and managed by three ownermanagers who bought the pany from a large corporation in the mid 1990’s, Company Y employed approximately 40 people. The majority of this pany’s business was in the area of manufacturing electrical devices and their main product lines were Motors and Motor Parts、 Breakers、 and Control Parts. Company Y sold its products in the domestic market as well as abroad. A portion of the pany’s output was sold directly to endusers, while the remainder was sold with the help of independent distributors. The management of Company Y was interested in using the Integrated ABCEVA System for the purpose of cost control and profit planning. 3 Comparison of the costing systems During the field study, three costing systems (TCA, ABC and the Integrated ABCEVA System) were used to obtain cost information for each pany in order to 5 identify factors which may lead to distortions through arbitrary allocation of capital costs. In a parison, capital costs were only able to be traced by the Integrated ABCEVA System. The nature of the TCA and ABC systems resulted in arbitrary allocations of capital costs. 4 RESULTS The main objective of the data analysis presented in this section is to investigate which factors most often distort information provided by the ABC system. As mentioned in the methodology section, factors such as diversity in production volume、 product size、 product plexity、 material consumption, and setups often distort cost information. These factors are examined closely for possible allocation errors. Data Analysis for Company X The data analysis for Company X began with an examination of its cost structure. Company X’s overall costs for 1998 were evaluated by paring the percentages of direct costs (direct labor and direct material)、 operating costs (overhead) and capital costs as shown in Exhibit 1. Exhibit 1. Cost Analysis for Company X in Thousands of Dollars Direct Cost Operating Cost Capital Cos