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Industry: Email Alert RSS FeedThose ABC blues. (views on activity-based costing)
Management Accounting (UK), November, 1995 by Maynard, Ross
Activity-based costing has been criticised by some observers, who believe that cost drivers are an unreliable means of apportioning fixed costs to variable levels of output. It can often simply lead to many activities being listed, creating the risk of miscoding and excessive bureaucracy. Activity-based costing can be effective, but only if care is taken to focus on a small, information-rich set of ideas.
`I've just come back from an activity-based costing holiday', he said.
`An activity-based costing holiday?', I replied dryly.
`Yes', he said, 'it cost a fortune but there were lots of activities to do'. He smiled wickedly. He likes a good joke, does Theodore Fox. `In fact', he continued, `I bet you and I could work out exactly how much each activity...
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