Abstract

This paper assesses the influence of the level of competition, product customization, importance of product costs in decision making and operating unit size on the frequency with which product costs are used in decision making. As the frequency of use is measured on a three-point ordinal scale of sometimes using, often using or using product costs all the time in decision making, the influence of the four constructs is tested using ordinal regression rather than ordinary least squares regression. Based on the questionnaire responses from 240 British management accountants, the results of the ordinal regressions show that the log odds of operating units sometimes using, or sometimes or often using product costs in decision making is negatively related to the importance of product costs in selling price decisions and operating unit size measured by the number of employees.

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