An Analysis of Activity-Based Costing in a Manufacturing System
Activity-Based Costing (ABC) represents an
alternative paradigm to traditional cost accounting system and
it often provides more accurate cost information for decision
making such as product pricing, product mix, and make-orbuy
decisions. ABC models the causal relationships between
products and the resources used in their production and traces
the cost of products according to the activities through the use
of appropriate cost drivers. In this paper, the implementation
of the ABC in a manufacturing system is analyzed and a
comparison with the traditional cost based system in terms of
the effects on the product costs are carried out to highlight the
difference between two costing methodologies. By using this
methodology, a valuable insight into the factors that cause the
cost is provided, helping to better manage the activities of the
company.
[1] M. Özbayrak, M.Akgün, and A.K. Türker, "Activity-based cost
estimation in a push/pull advanced manufacturing system," International
Journal of Production Economics, vol. 87, pp. 49-65, 2004.
[2] R. Cooper, and R.S. Kaplan, "How cost accounting distorts product
costs," Management Accounting, vol. 69, pp. 20-27, 1988.
[3] G. Kim, C.S. Park, and M. J. Kaiser, "Pricing investment and
production activities for an advanced manufacturing system,"
Engineering Economist, vol. 42, no. 4, pp.303-324, 1997.
[4] A. Gunasekaran, and M.Sarhadi, "Implementation of activity-based
costing in manufacturing," International Journal of Production
Economics, vol.56-57, pp. 231-242, 1998.
[5] D. Ben-Arieh, and L. Qian, "Activity-based cost management for design
and development stage," International Journal of Production Economics,
vol.83, pp.169-183, 2003.
[6] R. J. Lewis, "Activity-based models for cost management systems,"
Quorum Books, Westport, CT, 1995.
[7] U. Köker, "Activity-based costing: Implementation in a sanitaryware
company," M.Sc. Thesis, Department of Industrial Engineering,
University of Dokuz Eyl├╝l, 2003.
[8] G. Cokins, "Activity-based cost management making it works,"
McGraw-Hill. Inc., 1997.
[1] M. Özbayrak, M.Akgün, and A.K. Türker, "Activity-based cost
estimation in a push/pull advanced manufacturing system," International
Journal of Production Economics, vol. 87, pp. 49-65, 2004.
[2] R. Cooper, and R.S. Kaplan, "How cost accounting distorts product
costs," Management Accounting, vol. 69, pp. 20-27, 1988.
[3] G. Kim, C.S. Park, and M. J. Kaiser, "Pricing investment and
production activities for an advanced manufacturing system,"
Engineering Economist, vol. 42, no. 4, pp.303-324, 1997.
[4] A. Gunasekaran, and M.Sarhadi, "Implementation of activity-based
costing in manufacturing," International Journal of Production
Economics, vol.56-57, pp. 231-242, 1998.
[5] D. Ben-Arieh, and L. Qian, "Activity-based cost management for design
and development stage," International Journal of Production Economics,
vol.83, pp.169-183, 2003.
[6] R. J. Lewis, "Activity-based models for cost management systems,"
Quorum Books, Westport, CT, 1995.
[7] U. Köker, "Activity-based costing: Implementation in a sanitaryware
company," M.Sc. Thesis, Department of Industrial Engineering,
University of Dokuz Eyl├╝l, 2003.
[8] G. Cokins, "Activity-based cost management making it works,"
McGraw-Hill. Inc., 1997.
@article{"International Journal of Mechanical, Industrial and Aerospace Sciences:52952", author = "Derya Eren Akyol and Gonca Tuncel and G. Mirac Bayhan", title = "An Analysis of Activity-Based Costing in a Manufacturing System", abstract = "Activity-Based Costing (ABC) represents an
alternative paradigm to traditional cost accounting system and
it often provides more accurate cost information for decision
making such as product pricing, product mix, and make-orbuy
decisions. ABC models the causal relationships between
products and the resources used in their production and traces
the cost of products according to the activities through the use
of appropriate cost drivers. In this paper, the implementation
of the ABC in a manufacturing system is analyzed and a
comparison with the traditional cost based system in terms of
the effects on the product costs are carried out to highlight the
difference between two costing methodologies. By using this
methodology, a valuable insight into the factors that cause the
cost is provided, helping to better manage the activities of the
company.", keywords = "Activity-based costing, manufacturing
systems, product costs, traditional costing.", volume = "1", number = "11", pages = "642-4", }