Cost and performance management in the sawmilling industry

Author

Torgrim Tunes, Anders Q. Nyrud and Birger Eikenes

Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, 8-11, issue 41

Abstract: Joint costs are costs which cannot be readily identified with individual products. They are especially prominent in extractive, agricultural and chemical industries. In this article we consider methods used by the Norwegian sawmilling industry to allocate joint costs. A survey of joint cost accounting systems in use in Norwegian sawmills was carried out using structured interviews. In order to analyze the results from the interviews we conducted a Cross Case Analysis. According to the results Norwegian sawmills do not allocate joint costs, except from some ad-hoc methods inapplicable for joint cost allocation to products. There are several reasons for this. The problem is perceived as difficult to solve and many of the respondents consider the benefit as limited. There are shortcomings in existing joint cost allocation systems, and finally, there is a lack of interest and knowledge about cost accounting.

Keywords: Joint costs; cost allocation; structured interview; sawmilling; Agribusiness; Land Economics/Use (search for similar items in EconPapers)
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