Accounting for quality in food manufacturing firms

S. Andrew Starbird
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S. Andrew Starbird: Institute of Agribusiness, Santa Clara University, Postal: Institute of Agribusiness, Santa Clara University

Agribusiness, 1991, vol. 7, issue 5, 463-474

Abstract: Competitive food manufacturers and processors must establish and maintain a high level of product quality. Statistical quality control (SQC) is a tool for establishing quality standards and measuring deviations from these standards. Cost variance analysis is an accounting technique that measures the importance of deviations from production standards in terms of firm level objectives. The method presented in this article links quality control and cost accounting by (a) defining quality standards based upon the firm's profit maximization objective, and (b) measuring the importance of nonstandard quality by its effect on profit. The method is compared to traditional cost accounting techniques.

Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:7:y:1991:i:5:p:463-474

DOI: 10.1002/1520-6297(199109)7:5<463::AID-AGR2720070505>3.0.CO;2-5

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