Title: STRATEGIC COST MANAGEMENT FOR PRODUCT PROFITABILITY ANALYSIS
Abstract: The design and architecture of the activity-based cost management (ABC/M) cost assignment network provides the solution to calculate relatively more accurate costs and profit margins. In complex, support-intensive organisations there can be a substantial chain of indirect and shared activities supporting the direct work activities that eventually trace into the final cost objects. With ABC/M, the demands on work are communicated via activity drivers and their driver cost rates. Activity costs usually traced to a sustaining cost object group popularly called business (or organisational) sustaining costs. This modelling technique separates the business sustaining costs as not being involved with making or delivering a product or serving a customer. It prevents unfairly over-costing products or customers yet allows for all expenses to be traced. Because the product costs from ABC/M will be different compared to the costs from the existing, broadly-averaged and non-causal relationship method, product profits will also be different.
Publication Year: 2017
Publication Date: 2017-05-10
Language: en
Type: other
Indexed In: ['crossref']
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Cited By Count: 1
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