How to implement activity‐based costing
Abstract
As the manufacturing environment moves to computer‐integrated manufacturing and the products that are manufactured are diverse, conventional cost systems can report seriously distorted product costs. Discusses the solutions to these problems. Activity‐based costing, initiated and popularized by Robin Cooper and Robert S. Kaplan, can solve these distorted problems. Activity‐based costing (ABC) is defined as “the collection of financial and operation performance tracing the significant activities of the firm‐to‐product cost”. Discusses the ABC system design and ABC implementation. The five steps in the design of an ABC system are: aggregate actions into activities; report the cost of activities; identify activity centres; select first‐stage cost drivers; and select second‐stage cost drivers. The implementation plan consists of seven phases: an ABC seminar; a design seminar; design and data gathering; progress meetings; an executive seminar; result meetings; and interpretation meetings.
Keywords
Citation
Jong No, J. and Kleiner, B.H. (1997), "How to implement activity‐based costing", Logistics Information Management, Vol. 10 No. 2, pp. 68-72. https://doi.org/10.1108/09576059710815725
Publisher
:MCB UP Ltd
Copyright © 1997, MCB UP Limited