EVOLUTIONARY APPROACH TO THE CLASSIFICATION OF COST ACCOUNTING SYSTEMS

Abstract

A classification of cost accounting systems based on evolutionary society development is presented. There are two approaches of  cost accounting methods classification based on papers of Ukrainian scientists.  The first is the classification by country of origin and using, the second is based on the presenting traditional and non-traditional methods.

The author tried to analyze the positions of scientists on the classification of cost accounting methods through evolutionary transformations of economic and social relations. Obtained  results allow to divide the history of the cost accounting system development into two periods. The first relates to the industrial era and the industrial revolution and is characterized by the emergence and development of traditional (classical) accounting systems for production costs and its calculation. The second period involves the transition of society to the next post-industrial stage and the emergence of new management concepts that are oriented towards strategic thinking and consumer satisfaction.

Traditional systems of cost accounting include full costing or  absorption costing system which is based on the division of costs on the direct and indirect in relation to the object, and variable and fixed costs in relation to the volume of production. Therefore, there are three alternatives: actual-costs, normal-costs, and standard-costs. Two  basic models (job costing and process costing)  are used for cost accounting in order to calculate self-cost of the  product unit  according to the peculiarities of the production process. In case, if none of the basic models does not meet the specifics of the production environment, a hybrid-costing system is used, which is a combination of two basic models.

The  study has confirmed that the historical development of cost accounting systems was carried out in accordance with the evolutionary society development. Property  relations on means of production  and class society determined by two models of economic formation. However, obtained results has proved that there is no significant difference between evolutionary development of the accounting systems in the socialist and capitalist economies. Vice  versa, cost accounting systems of the industrial stage of society development apart economy models have two fundamental principles: recording only actual (real) data and production process orientation.