On the Influence of Task Interruption and Interactive Time Estimation on Estimation Error in Time-Based Costing Systems

Time estimates are an important part of many costing systems. As they may be subject to estimation error and hence result in measurement error in product and service costs, it is important to understand the sources of this estimation error as well as mechanisms to mitigate them. We performed a compu...

Full description

Saved in:
Bibliographic Details
Published inThe European accounting review Vol. 31; no. 2; pp. 519 - 541
Main Authors Maussen, Sophie, Hoozée, Sophie
Format Journal Article
LanguageEnglish
Published Routledge 15.03.2022
Subjects
Costing accuracy
Estimation error
Task interruption
Time estimation
Online AccessGet full text
ISSN0963-8180
1468-4497
DOI10.1080/09638180.2020.1826339

Cover

More Information
Summary:Time estimates are an important part of many costing systems. As they may be subject to estimation error and hence result in measurement error in product and service costs, it is important to understand the sources of this estimation error as well as mechanisms to mitigate them. We performed a computer-based lab experiment to test the joint impact of task interruption and interactive time estimation on the accuracy of time estimates. As predicted, we find that the negative impact of task interruption on time estimation accuracy is mitigated when participants are allowed to interactively discuss their time estimates before making a final time estimate alone. We explain our findings through the underlying effects of cognitive load and confidence. Hence, managers may improve the accuracy of their time-based costing systems by enabling an interactive time estimation process to offset the detrimental effect of task interruption.
ISSN:0963-8180
1468-4497
DOI:10.1080/09638180.2020.1826339