green accounting
An Annotated Bibliography of Activity Based Costing by Patricia M. Privette
MBA student at The Ohio State University and Lt. Col. Terrance L. Pohlen, USAF, Ph.D
Terrance_Pohlen@dscc.dla.mil
9-6-95
Activity-Based Costing (ABC)
General Readings - Activity-Based Costing
Ali, Hamdi F., A Multicontribution Activity-Based Income Statement, Journal of Cost Management, F94, pp. 45-54.
The author outlines the development of an ABC based income statement. The multicontribution income statement reflects the individual contribution by product, product line, operations and facilities. The ABC based income statement attempts to incorporate contribution margin analysis into the income statement - making the income statement a more valuable management tool. [I]
Ames, B. Charles and James D. Hlavacek, Vital Truths About Managing Your Costs, Harvard Business Review, January-February 1990, pp. 140-147.
The authors discuss four truisms that apply universally to all businesses: 1) In the long run, you must be a lower cost supplier than all others providing equivalent products or services, 2) Inflation-adjusted costs of production must continuously decrease (the experience curve), 3) The true cost and profit picture for each product must be known and 4) Cash flow is as important as profit. The "cycle of decay" (when cost cutting efforts lead to competitive decay) is typically begun when management uses financial accounting data, not control data, for decision making. Costs are classified as bedrock fixed (very few qualify as this), managed fixed, direct variable and shared costs. Most costs qualify as managed, and therefore are controllable in the long run. [I]
Beaujon, George J. and Vinod R. Singhal, Understanding the Activity Costs in an Activity-Based Cost System, Journal of Cost Management, Vol. 4, No. 1, Sp90, pp. 51-72.
The authors identify three elements of an ABC structure that have a natural interpretation as activities: 1) activity centers, 2)
MBA student at The Ohio State University and Lt. Col. Terrance L. Pohlen, USAF, Ph.D
Terrance_Pohlen@dscc.dla.mil
9-6-95
Activity-Based Costing (ABC)
General Readings - Activity-Based Costing
Ali, Hamdi F., A Multicontribution Activity-Based Income Statement, Journal of Cost Management, F94, pp. 45-54.
The author outlines the development of an ABC based income statement. The multicontribution income statement reflects the individual contribution by product, product line, operations and facilities. The ABC based income statement attempts to incorporate contribution margin analysis into the income statement - making the income statement a more valuable management tool. [I]
Ames, B. Charles and James D. Hlavacek, Vital Truths About Managing Your Costs, Harvard Business Review, January-February 1990, pp. 140-147.
The authors discuss four truisms that apply universally to all businesses: 1) In the long run, you must be a lower cost supplier than all others providing equivalent products or services, 2) Inflation-adjusted costs of production must continuously decrease (the experience curve), 3) The true cost and profit picture for each product must be known and 4) Cash flow is as important as profit. The "cycle of decay" (when cost cutting efforts lead to competitive decay) is typically begun when management uses financial accounting data, not control data, for decision making. Costs are classified as bedrock fixed (very few qualify as this), managed fixed, direct variable and shared costs. Most costs qualify as managed, and therefore are controllable in the long run. [I]
Beaujon, George J. and Vinod R. Singhal, Understanding the Activity Costs in an Activity-Based Cost System, Journal of Cost Management, Vol. 4, No. 1, Sp90, pp. 51-72.
The authors identify three elements of an ABC structure that have a natural interpretation as activities: 1) activity centers, 2)
Bibliography: Johnson H. Thomas and Robert S. Kaplan, Relevance Lost, Boston, MA: McGraw-Hill, 1991. The authors explore the business environments of the nineteenth and early twentieth centuries that influenced cost system design during these periods McConville, Daniel J., Start with ABC, Industry Week, September 6, 1993, pp. 33-36. ABC and ABM are perhaps the most important concepts since the introduction of TQM