activity based costing - page 8
Keywords: ABC
By finil on 15/05/2009
Level: Master's degree (MA, MBA, MSc, MEng, MRes, MPhil etc)
Page Number: 8 of 8 pages: 1 2 3 4 5 6 7 8
the main benefits of ABC and ABCM are different product costings; greater visibility of overheads; emphasis on activity crossing departmental boundaries; improved understanding of overhead cost behaviour by managers; control and reduction of overhead cost by eliminating or reorganising activities; increased resources for core or value-added activities; new performance measures; and a common language acroos the organisation. Despite the problem and limitations associated with ABC and ABCM, the managers in most organisations that have implemented it are continuing to use it enthusiastically and are finding that its benefits outweigh it costs. It appears that the activity-based approach is worth considering for all organisations where overheads are a significant percentage of total costs.
References
John Innes and Falconer Mitchell - Issues in management accounting.
http://www.dekkerltd.com/library/ABC02AAAfinal.pdf
Wikipedia
http://www.12manage.com/methods_abc.html
(http://www.accaglobal.com/students/publications/finance_matters/archive/2000/45/15674 )
(http://www.serviammagazine.com/mag/MarApr2008/Images/Serviam_MarApr08_Special_Report.pdf )
(http://highered.mcgraw-hill.com/sites/dl/free/0073128155/394466/blo28155_ch05.pdf )
(http://www.valuecreationgroup.com/activity_based_costing_case_study.htm )
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