scholarly journals Activity-based costing as an information basis for an efficient strategic management process

2013 ◽  
Vol 58 (197) ◽  
pp. 95-119
Author(s):  
Djordje Kalicanin ◽  
Vladan Knezevic
Keyword(s):  
Balanced Scorecard ◽  
Low Cost ◽  
Activity Based Costing ◽  
Strategic Decisions ◽  
Cost Information ◽  
Monitoring Cost ◽  
Cost Behaviour ◽  
Basic Characteristics ◽  
A Company ◽  
Information Basis

Activity-based costing (ABC) provides an information basis for monitoring and controlling one of two possible sources of competitive advantage, low-cost production and lowcost distribution. On the basis of cost information about particular processes and activities, management may determine their contribution to the success of a company, and may decide to transfer certain processes and activities to another company. Accuracy of cost information is conditioned by finding an adequate relation between overhead costs and cost objects, identifying and tracing cost drivers and output measures of activities, and by monitoring cost behaviour of different levels of a product. Basic characteristics of the ABC approach, such as more accurate cost price accounting of objects, focusing on process and activity output (rather than only on resource consumption) and on understanding and interpretation of cost structure (rather than on cost measurement), enable managers to estimate and control future costs more reliably. Thus the ABC methodology provides a foundation for cost tracing, analysis, and management, which entails making quality and accurate operative and strategic decisions as a basis for the longterm orientation of a company. ABC is also complementary to the widely accepted technique of strategic planning and strategy implementation known as Balanced Scorecard (BSC).

Activity-Based Costing in the Service Sector: The Buckeye National Bank

2001 ◽  
Vol 16 (3) ◽  
pp. 381-408 ◽  
Author(s):  
Linda Smith Bamber ◽  
K. E. Hughes
Keyword(s):  
Business Strategy ◽  
Service Sector ◽  
Strategic Decision ◽  
Business Strategies ◽  
Base System ◽  
Activity Based Costing ◽  
Strategic Decisions ◽  
Cost Information ◽  
Traditional System ◽  
National Bank

The U.S. Bureau of the Census projects that by 2006, the service sector will employ 74 percent of the workforce. This case illustrates why a major segment of the service sector—banks—needs accurate cost information to make strategic decisions, and how more refined accounting systems help fulfill this need. Buckeye National Bank is a hypothetical bank that has suffered falling profits despite a shift in customer base toward retail customers, which the current information system reports are more profitable than business customers. Following a step-by-step approach, you will develop the Bank's average cost of serving a retail customer account and a business customer account, under (1) the Bank's traditional single allocation base system, and (2) a (pilot test) activity-based costing system. You will analyze these results to determine how and why costs reported by the activity-based system differ from the costs reported by the traditional system, and what this difference means for the Bank's business strategy. Finally, you will consider how the Bank's managers can use the new, more refined activity-based cost data in strategic decision making, including controlling costs and developing more profitable business strategies.

A Comparative Analysis of Activity-Based Costing and Traditional Costing Systems

2012 ◽  
pp. 1429-1440
Author(s):  
Khaled Samaha ◽  
Sara Abdallah
Keyword(s):  
Cost Accounting ◽  
Activity Based Costing ◽  
Strategic Decisions ◽  
Cost Information ◽  
Accounting Systems ◽  
Organizational Environments ◽  
Corporate Commitment ◽  
Traditional Costing ◽  
Abc Method ◽  
Manufacturing Organization

Today, organizational environments are increasingly characterized by an expanding use of advanced technologies. A company’s management accounting system should capture the underlying technology, be consistent with corporate commitment to total quality and increased automation, and promote its efforts to compete on the basis of cost, quality, and lead time. However, the recent literature reveals that traditional cost accounting systems systematically introduce serious product cost distortions, which lead to inappropriate strategic decisions. Activity-Based Costing (ABC) represents an alternative paradigm that is giving more accurate and traceable cost information. The objective of this case is to illustrate the application of ABC method in a single manufacturing organization operating in the metal industry and to compare the results of ABC with volume based costing (traditional costing) method. The results of the application highlight the weak points of volume based costing which assigns factory overhead costs using direct labor-hours or machine-hours as a cost driver. As a result, volume-based costing under-costs low-volume product (i.e. products requiring fewer direct labor hours in total), while it over-costs high-volume products (i.e. products requiring more direct labor-hours in total), and thus, a product is subsidized at the expense of others. In cost accounting this is called cross-subsidization. However, activity-based costing traces overhead consumption by each product and thus provides a more accurate per-unit overhead cost.

A Comparative Analysis of Activity-Based Costing and Traditional Costing Systems

2011 ◽  
pp. 41-53
Author(s):  
Khaled Samaha ◽  
Sara Abdallah
Keyword(s):  
Cost Accounting ◽  
Activity Based Costing ◽  
Strategic Decisions ◽  
Cost Information ◽  
Accounting Systems ◽  
Organizational Environments ◽  
Corporate Commitment ◽  
Traditional Costing ◽  
Abc Method ◽  
Manufacturing Organization

Today, organizational environments are increasingly characterized by an expanding use of advanced technologies. A company’s management accounting system should capture the underlying technology, be consistent with corporate commitment to total quality and increased automation, and promote its efforts to compete on the basis of cost, quality, and lead time. However, the recent literature reveals that traditional cost accounting systems systematically introduce serious product cost distortions, which lead to inappropriate strategic decisions. Activity-Based Costing (ABC) represents an alternative paradigm that is giving more accurate and traceable cost information. The objective of this case is to illustrate the application of ABC method in a single manufacturing organization operating in the metal industry and to compare the results of ABC with volume based costing (traditional costing) method. The results of the application highlight the weak points of volume based costing which assigns factory overhead costs using direct labor-hours or machine-hours as a cost driver. As a result, volume-based costing under-costs low-volume product (i.e. products requiring fewer direct labor hours in total), while it over-costs high-volume products (i.e. products requiring more direct labor-hours in total), and thus, a product is subsidized at the expense of others. In cost accounting this is called cross-subsidization. However, activity-based costing traces overhead consumption by each product and thus provides a more accurate per-unit overhead cost.

To Identify The Different Parameter Feasible For Application Of Ppp In Real Estate For Private Construction Firm

Think India ◽  
2019 ◽  
Vol 22 (2) ◽  
pp. 394-402
Author(s):  
Sandeep Alankar ◽  
Hemanshu Ahire ◽  
Atul R Kolhe
Keyword(s):  
Low Cost ◽  
Rural India ◽  
Housing Project ◽  
Private Partnership ◽  
Urban India ◽  
Construction Firm ◽  
Infrastructure Project ◽  
Private Housing ◽  
Government Data ◽  
A Company

In developing India, we faced with the problems of infrastructure and shelter to due to increasing migration rate from rural India to urban India. As per government data more than 2 million low cost houses required for peoples, but for this very huge fund required which is not possible for government, so Public-Private Partnership (PPP) is right approach to address this problem.PPP is very broadly use for infrastructure project but this concept is not use in private housing project.  Private Private Partnership have now become a preferred approach for inter firm business relations. As there are good business and accounting reasons to create Private Privat Partnership with a company that has complementary capabilities and resources

Application of the Balanced Scorecard in the Veterinary company and Supplies Pa'lante S.P.R of R.L. of C.V

2019 ◽  
pp. 11-16
Author(s):  
Guillermo Benítez López ◽  
Margarita Cruz-Chávez ◽  
María de los Ángeles Valdez-Pérez
Keyword(s):  
Balanced Scorecard ◽  
Business Strategies ◽  
Reliable Measurement ◽  
The Balanced Scorecard ◽  
Proper Functioning ◽  
Measurement Strategy ◽  
A Company ◽  
And Training

The objective of the application of the Balanced Scorecard methodology in the Veterinary and supplies PA`LANTE S.P.R. OF R.L. DE C.V. In the area of production and repair of trailers is to identify exactly what should be monitored to introduce a reliable measurement strategy that provide information on performance and understand why they are giving certain results, the methodology is to align the companies towards the achievement of business strategies, through tangible objectives and indicators as it converts the vision of companies into action through a coherent set of indicators grouped into four business perspectives that are: Financial, Clients, Internal Processes and Training and Growth since this methodology suggests that these perspectives cover all the processes necessary for the proper functioning of a company. The contribution of the methodology is to determine what factors are influencing the area of production and repair of trailer that are affecting the production times considering the last three quarters of the year 2018.

Flexible long range planning using low cost information

1991 ◽  
Vol 18 (2) ◽  
pp. 151-173 ◽  
Author(s):  
Juan De Dios Ortúzar ◽  
Luis G. Willumsen
Keyword(s):  
Long Range ◽  
Low Cost ◽  
Cost Information ◽  
Long Range Planning

The Effect of Application of Management Accounting To Performance through Strategy

2017 ◽  
Vol 2 (4) ◽  
pp. 12-20
Author(s):  
Ali Muktiyanto
Keyword(s):  
Higher Education ◽  
Balanced Scorecard ◽  
Structural Equation ◽  
Management Accounting ◽  
Measurement Techniques ◽  
Economic Value ◽  
Value Added ◽  
Equation Modeling ◽  
Activity Based Costing ◽  
Study Program

Objective - The context strategy as process and strategy as content have significant impact to the correlation between strategy and management accounting (Muktiyanto, 2016; Parnell, 2010). In the context strategy as process, this paper aims to investigate the role of management accounting to performance through the choice of strategy. Methodology/Technique - The method by structural equation modeling on 70 (seventy) of undergraduate Accounting Study Program (composition: 70% Private Universities and 30% Public Universities). Opposite with Henry (2006) and Widener (2007) and support with Speklé and Verbeeten (2014) and Acquaah (2013). Findings - This paper shown that the accounting management directly influence the performance, but not mediated by strategy. The practice of budgetary slack, the implementation of modern accounting such as activity-based costing and target costing, the use of performance measurement techniques such as the balanced scorecard, measurements based performance, and the economic value added, as well as integrated information system is an important factor in improving the performance of Higher Education. Unfortunately, the choice of strategy moderate or "stuck in the middle" has not been able to improve the performance of Higher Education directly nor as a mediating between management accounting and performance. However, in the context strategy as process, management accounting have positive influence to the strategic choice. Novelty - The effort of Higher Education to improve the performance is choose a single strategy or focus on the prospector's strategy. Type of Paper: Empirical Keywords: Management Accounting, Strategy, Performance, Indonesia. JEL Classification: M40, M41

Danaher—The Making of a Conglomerate

2010 ◽  
pp. 1-26
Author(s):  
Sriram Nadathur ◽  
L. J. Bourgeois
Keyword(s):  
Raw Materials ◽  
Low Cost ◽  
Price Increases ◽  
Organic Growth ◽  
Declining Demand ◽  
A Company

Prudential Equity Group had downgraded Danaher to underweight status, citing concerns over its inadequate organic growth. By March 2009, its CEO wondered how to keep growing a company that faced changing worldwide economic circumstances, pressure from low-cost competitors, new competitors, flat or declining demand for company products, price increases for certain raw materials, and criticism from market analysts.

scholarly journals STRATEGY IMPLEMENTATION OF NATIONAL HEALTH INSURANCE USING BALANCED SCORECARD METHOD: A CASE STUDY IN AN – NISA HOSPITAL IN TANGERANG

2021 ◽  
Vol 5 (2) ◽  
Author(s):  
Luh Putu Sinthya Ulandari
Keyword(s):  
Health Insurance ◽  
National Health Insurance ◽  
National Health ◽  
Balanced Scorecard ◽  
Business Models ◽  
Clinical Pathways ◽  
Low Cost ◽  
Successful Implementation ◽  
Target Market ◽  
Depth Interview

One of the private hospital successful implementation the National Health Insurance with cost efficiency without neglecting the quality of service is An-Nisa Hospital. This study aimed to finding out the strategy of An-Nisa Hospital in the implementation of the National Health Insurance with Balanced Scorecard. The research was conducted in May 2018 using qualitative approach. Data was collected through in-depth interview to 7 informants from hospital and 2 informants from BPJS Kesehatan. The subjects were selected purposively and the data was analyzed using thematic analysis. The results show that there are several strategies that have been developed and implemented, including: adding types of services, increasing the capacity of inpatients and polyclinics, increasing doctor practice slots, completing medical equipment, applying the principle of low cost and increasing working capital, choosing JKN patients as target market, develop 5 values propotition, complaint management, develop standard operating procedures, develop drug formulary and clinical pathways, carry out operational and audit controls, build business models, form casemix teams and claim management, develop training, giving reward and good salaries, build a competitive work environments, and pay attention to employee career paths. Through this strategy, An-Nisa Hospital is able to implement the JKN Program well and still record a surplus without sacrificing service quality

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