A Framework for Conducting Numerical Experiments on Cost System Design
45 Pages Posted: 29 Jun 2017 Last revised: 15 Apr 2020
Date Written: November 26, 2017
This paper aims to advance the use of numerical experiments to investigate issues that surround the design of cost systems. As with laboratory and field experiments, researchers must decide on the independent variables and their levels, the experimental design, and the dependent variables. Options for dependent and independent variables are ample, as are the ways in which we can model the relations among these variables. We provide a modular framework that provides structure to these variables, their definitions, and the modeling of the connections among them. Further, we offer some insights into the design and layout of output data files, which will allow for easier data analysis. We also present tips on how to report the results from such numerical experiments effectively. Finally, we furnish online the source code in C# for many of these modules. We hope that the framework and guidance provided in this paper will help spur and focus further meaningful work in this important area of management accounting.
Keywords: cost systems, numerical experiments, simulation, managerial accounting
JEL Classification: M41, C62, C63, C99
Suggested Citation: Suggested Citation