ABC from first principles. (activity-based costing and management accountants; includes related notes providing an example)

Management Accounting (UK), June, 1994 by Mitchell, Mike; Wycherley, Ian

Activity-based costing (ABC) can have a major impact on how production costs are measured, and so on profitability, as is shown by the case study of a publisher. Cost drivers should be identified and a focus on expensive resources is the most effective way of tackling this. An expensive ABC software system should not be purchased until the needs of the user have been fully identified. Systems can be developed by operating managers when formal systems do not seem appropriate, and this calls into question the role of accounting staff.

Recent articles on the practice of activity-based costing have often presumed that the onus is on the management accountant to drive the organisation's efforts to evaluate, design and implement new costing systems[1] Mike Mitchell and Ian...

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