Examines the system used to trace costs, products and services provided. Discusses purposes, benefits, effectiveness and the relationship to production systems management.
Written in 1999; 2,250 words; 18 sources; $ 79.95
Paper Summary:
Activity-Based Costing is a set of systems that a manager can use to trace historical costs (resources consumed) to activities and then, through those activities, to products or services provided (Tavana & Rappaport, 1997, 307). ABC allows local managers to develop activities for their cost needs while simultaneously generating service or process costs. The advantage of the detail in ABC for the manager is to give visibility to value added and non-value activities (Masters, Allenby, La Londe, & Maltz, 1992, 47).
From the Paper:
"ACTIVITY-BASED COSTING AND ITS RELATIONSHIP TO
PRODUCTION SYSTEMS MANAGEMENT
What is Activity-Based Costing
Activity-Based Costing is a set of systems that a manager can use to trace historical costs (resources consumed) to activities and then, through those activities, to products or services provided (Tavana & Rappaport, 1997, 307). ABC allows local managers to develop activities for their cost needs while simultaneously generating service or process costs. The advantage of the detail in ABC for the manager is to give visibility to value added and non-value activities (Masters, Allenby, La Londe, & Maltz, 1992, 47).
Within this framework, are further sub-definitions."
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