Back to basics? (research and discussion on activity-based costing; includes related notes on ABC in the service sector)

Management Accounting (UK), June, 1994 by Hankes, Janice; Jeffries, Andrea

Activity-based costing (ABC) has been examined in the UK, New Zealand and Australia, and the trend toward ABC has brought a greater emphasis on cost control and enthusiasm for accounting ideas. ABC can give a better idea of tru costs and profitability and help in setting prices. However, ABC has not penetrated Japan, and can lead to an undue influence of product costs on pricing policies. ABC has tended to find resistance in France, where it was introduced relatively late, and traditional systems had been developed in a more sophisticated way than in the US.

The debate about the advantages and disadvantages of ABC and its derivatives continues. At this year's round-up of annual academic conferences, it seemed to be the dominant issue in management accounting. Andrea...

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