Calculation of Industrial Services

Background and problem discussion: We believe it is of high interest studying potential problems with costing industrial services based on the fact that literature have stated that manufacturing are moving towards becoming more service oriented, but at the same time literature is rather limited in terms of discussing costing of services. Based on this discussion we have decided on conducting an explorative case study at SKF. The knowledge that SKF have stated that they are shifting towards becoming more service oriented in combination with fact that they for long have played an important role in accounting practise makes them an interesting example when searching for potential problems within calculation industrial services…


1.1 Background
1.2 Discussion of the Problem
1.2 Problem Definition
1.3 Purpose
2.1 Research Approach
2.2 Research Method
2.3 Data Collection
2.3.1 Secondary Data
2.3.2 Primary Data
2.4 Data Collection Techniques
2.4.1 Interviews and Documentation
2.4.2 Semi-Structured and Unstructured Interviews
2.5 Selection Methods
2.5.1 Selection of Case Company
2.5.2 Effects of having SKF as our Case Study Company
2.6 Realization of the Study
2.6.1 Developing the Questioner
2.6.2 Guidelines for Interviews
2.6.3 Realization and Selection of Interviews
2.6.4 Analysis of the Empirical Findings
2.7 Evaluation of Study
2.7.1 Validity
2.7.2 Reliability
2.7.3 Critique of Sources
2.7.4 Possibility to Generalise
2.8 Summary of our Method Selections
3.1 Defining a Service
3.1.1 A Classification of Services
3.1.2 The Service Infusion in Manufacturing Companies
3.2 Product Costing
3.2.1 Absorption Costing
3.2.2 Variable Costing
3.3 Standard Costing
3.4 Direct Costs
3.5 Relationship Costs
3.5.1 Relationship Cost as a Model
3.6 Overhead Cost
3.6.1 The Traditional-method
3.6.2 The ABC-method
3.7 Profit Margin
3.7.1 Cost-based
3.7.2 Value-based
3.7.3 Competition-based
4.1 Defining Service at SKF
4.1.1 Current Definitions and Classifications
4.1.2 Problems Related to Insufficient Service Classification
4.1.3 Practical Categorisation
4.2 Practical Guidelines for Calculating Services
4.2.1 Standardised Template/Checklist
4.2.2 Full Cost Distribution versus Variable Costing
4.3 Standard Costs
4.3.1 Standard Costs in Relation to Development Costs
4.4 Direct Costs
4.4.1 Identifying and Quantifying Direct Costs
4.4.2 Purchasing
4.4.3 Other Viewpoints Concerning Calculation of Direct Costs
4.5 Relationship Costs
4.6 Overhead Cost
4.6.1 Overhead Cost Object
4.6.2 Keys for Distributing Overhead Costs
4.6.3 Other Viewpoints Concerning Calculation of Overhead Costs
4.7 Profit Margin
4.7.1 Practical Guidelines for Setting the Profit Margin
4.7.2 Pricing Strategies
4.7.3 Risk Analysis
5.1 Defining and Classifying Services
5.2 Practical Guidelines for Calculation
5.3 Standard Costs
5.4 Direct Cost
5.5 Relationship Costs
5.6 Overhead Cost
5.7 Profit Margin
6.1 Conclusions
6.2 Suggestions for Future Research
7.1 Books and Articles
7.2 Other

Author: Persson, Fredrik,Rutgersson, Henrik

Source: Goteborg University

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Calculation of Industrial Services