Value Creation in Management Accounting

CHAPTER 9

Using VCMS in a Job Shop

To keep our faces toward change and behave like free spirits in the presence of fate is strength undefeatable.

Helen Keller1

It is often noted that there are very few modern models that work as well in service companies as they do in manufacturing firms. The value-based cost management system (VCMS) is an exception to this rule—it works equally well in both settings and it is often easier to implement in service organizations. The reason for this is that the VCMS does not use cost drivers, so there is no need to worry about the challenge of measuring the outcome of a service in a definable way. Since the analysis emphasizes activities and value attributes rather than activity drivers, it can manage service-based ...