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1 – 10 of over 5000
Article
Publication date: 1 December 1994

Sofia Börjesson

Activity‐based approaches, often referred to as activity‐based costingor activity‐based management, have recently gained attention as beinguseful tools for a better understanding…

2420

Abstract

Activity‐based approaches, often referred to as activity‐based costing or activity‐based management, have recently gained attention as being useful tools for a better understanding of cost behaviour and cost control. Such approaches aim at providing accurate cost information in order to keep track of costs and to yield continuous improvement. Presents two case studies where activity‐based projects were run. The two firms studied represent two different objectives with the activity analysis, namely product costing and activity control. The characteristics of the activity information affect its usefulness, and in this article, activity information is subdivided into quantitative and qualitative information. Argues that it is important to have a clear objective with an activity‐based approach in order to gather the appropriate type of activity information and thereby exploit the potential improvement opportunities. Only quantitative activity information suffices for approaches aiming at costing, whereas approaches aiming at activity control require also qualitative activity information. The two case studies illustrate the significance of using the type of activity information that fits the purpose.

Details

International Journal of Operations & Production Management, vol. 14 no. 12
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 1 November 2001

Martin Broad and David Crowther

The technique of ABC has been widely adopted by universities in the UK, with the assumption that the more accurate identification of costs makes them more manageable. It is the…

2080

Abstract

The technique of ABC has been widely adopted by universities in the UK, with the assumption that the more accurate identification of costs makes them more manageable. It is the purpose of this paper to consider this question of manageability through identification and allocation in the university sector and to question this as a basis for decision making and resource allocation. The type of costing systems in place in an organisation must meet the needs of the organisation as a whole and there are a number of factors that will affect the type of costing system that is required and there are a number of costing systems that can be used. This paper considers the use of ABC within a university and whether school costing and course costing can meet the requirements of a university facing a challenging business environment where a significant amount of pressure is being exerted on the financial stability of some universities. In doing so the ability of ABC to satisfy the informational requirements of a university is called into question.

Details

Journal of Applied Accounting Research, vol. 6 no. 2
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 1 March 1993

Malcolm J. Morgan

Examines the recent debate concerning traditional versusactivity‐based approaches to management accounting information ingeneral and product costing/pricing decisions in…

1045

Abstract

Examines the recent debate concerning traditional versus activity‐based approaches to management accounting information in general and product costing/pricing decisions in particular. Tests the relevance of activity‐based costing techniques in a real‐life manufacturing environment – pharmaceutical products. Examines the impact on product costs of changing to an activity‐based overhead allocation environment. The pilot results were sufficiently encouraging to suggest improved management information arising from a full‐scale implementation.

Details

Management Decision, vol. 31 no. 3
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 1 April 1993

B.M. Amsler, J.S. Busby and G.M. Williams

Traditional costing systems suffer from a number of problemsbecause of the way in which they allocate overheads: product costs havearbitrary components; managers lack information…

Abstract

Traditional costing systems suffer from a number of problems because of the way in which they allocate overheads: product costs have arbitrary components; managers lack information about what causes costs to be incurred; and it becomes impossible to know which of several product lines is the most profitable. Describes a case study in which activity‐based costing and process mapping were applied in combination in an engineering firm, where it was found that it was necessary to specify a method of process‐based costing.

Details

Integrated Manufacturing Systems, vol. 4 no. 4
Type: Research Article
ISSN: 0957-6061

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Article
Publication date: 1 August 2000

Klaus Ceynowa

In the context of the introduction of global budgeting, business management methods of control are gaining increasing importance in the academic sphere. Cost bearers are expecting…

1548

Abstract

In the context of the introduction of global budgeting, business management methods of control are gaining increasing importance in the academic sphere. Cost bearers are expecting from the universities a significant increase in the cost transparency of ser‐vice provision particularly in the structuring of a university cost accounting system. For the field of academic libraries the German Research Association has initiated the project ‘Cost Management for Academic Libraries’. The aim of the project is to develop a method of cost management appropriate to the financial management frame‐work of public sector provision for academic libraries. This contribution outlines the steps in the structuring of a method of cost controlling in the provision of academic literature and information worked out in the project. Because of the particular nature of the service and product provided by the library services, activity‐based cost man‐agement represents the most suitable method of control for libraries and other central facilities and can be used in particular to identify possibilities of cost reduction and to achieve optimum efficiency.

Details

Performance Measurement and Metrics, vol. 1 no. 2
Type: Research Article
ISSN: 1467-8047

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Article
Publication date: 1 February 2001

Jan Emblemsvag

The purpose of this paper is to present a new method for life‐cycle costing (LCC) called activity‐based LCC by employing the comprehensive activity‐based life‐cycle assessment…

7877

Abstract

The purpose of this paper is to present a new method for life‐cycle costing (LCC) called activity‐based LCC by employing the comprehensive activity‐based life‐cycle assessment method. A real‐life case study of a platform supply vessel operating in the North Sea is utilized to present the method, illustrate an implementation, including results, and discuss the benefits. Furthermore, due to the inherent uncertainty in LCC, handling of uncertainty is emphasized. A crucial side‐effect of handling uncertainty by employing Monte Carlo simulations – as activity‐based LCA prescribes – is the greatly enhanced tracing of critical success factors. Such tracing enables the shipowners to increase long‐term profitability by focusing on what is critical to their success. Also, a design option of using heavy fuel oil versus marine gas oil is investigated.

Details

Managerial Auditing Journal, vol. 16 no. 1
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 October 2007

K. Sartorius, C. Eitzen and P. Kamala

Activity Based Costing (ABC) has been researched extensively in developed countries. Research on these issues in South Africa is limited. This article creates a better…

2382

Abstract

Activity Based Costing (ABC) has been researched extensively in developed countries. Research on these issues in South Africa is limited. This article creates a better understanding of the design of ABC systems in South Africa, comparing ABC implementation in South Africa to that in several developed/developing countries. A quantitative methodology was adopted to evaluate the extent of ABC implementation. A survey‐case study methodology was used to identify reasons for implementation/ non‐implementation, problems and critical success factors relating to implementation. The results show that the extent of ABC implementation in South Africa is lower than that found in developed countries, but the evidence is inconclusive. Nevertheless, the results suggest that the issues facing ABC implementers in South Africa are similar to those faced in many other countries. This study provides South African companies with a comparative framework of important variables to be considered in implementing ABC.

Details

Meditari Accountancy Research, vol. 15 no. 2
Type: Research Article
ISSN: 1022-2529

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Article
Publication date: 6 November 2007

Edilberto J. Rodríguez Rivero and Jan Emblemsvåg

The aim of the paper is to present and illustrate a new approach for long‐range planning.

2609

Abstract

Purpose

The aim of the paper is to present and illustrate a new approach for long‐range planning.

Design/methodology/approach

Building on well‐tested frameworks such as activity‐based costing (ABC), life‐cycle costing (LCC) and Monte Carlo methods as well as earlier case studies, an approach is developed further and tested using a real‐life case.

Findings

The effectiveness of the approach is confirmed using a process‐oriented framework (ABC) and introducing an LCC perspective. Monte Carlo methods are used to handle uncertainty and identify risks and critical success factors.

Research limitation/implications

The presented research is a starting‐point for developing a simple approach for budgeting that overcomes many of the problems with traditional budgeting.

Practical implications

The paper shows how long‐range planning can be performed in a realistic fashion without ending up in many of the traps of traditional budgeting.

Originality/value

The paper presents an approach that can help corporations anticipate the future much more realistically than before.

Details

Review of Accounting and Finance, vol. 6 no. 4
Type: Research Article
ISSN: 1475-7702

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Article
Publication date: 7 August 2009

Norman T. Sheehan and Nicolai J. Foss

Porter's activity‐based view of the firm is a comprehensive strategic framework which analyzes firm‐level competitive advantage. Although Porter's activity‐based view is widely…

5757

Abstract

Purpose

Porter's activity‐based view of the firm is a comprehensive strategic framework which analyzes firm‐level competitive advantage. Although Porter's activity‐based view is widely cited by academics, taught to students, and applied by practitioners, little is known about its intellectual roots. Given that a framework's intellectual antecedents not only determine its current content, but also its future development, this paper aims to examine the intellectual roots of Porter's activity‐based view and the value chain.

Design/methodology/approach

The paper examines Porter's writings in an effort to document his influences while developing the activity‐based view and value chain. Porter's and other scholars' explanations are found to be lacking, so the paper ventures further down paths first suggested by Porter and others.

Findings

Whereas Porter's five forces framework built on the existing industrial organization paradigm, the activity‐based view is not derived from any existing paradigms. While consultants of the 1970s impacted Porter's development of the value chain and the activity‐based view, its deeper roots lay in operations research, particularly activity analysis; and the work of Arch Shaw, who was the first to teach a business policy course at Harvard Business School. Porter's contribution is to bring the diverse threads together into a coherent whole which managers can apply to analyze and improve their competitive positions.

Practical implications

Following Porter, the authors argue that activities are a key link between resource holdings and strategic positions. Therefore, it is only when the activity‐based and resource‐based views are integrated that they provide a comprehensive explanation of firm value creation.

Originality/value

The paper is the first to critically examine the intellectual antecedents of the activity‐based view.

Details

Journal of Strategy and Management, vol. 2 no. 3
Type: Research Article
ISSN: 1755-425X

Keywords

Article
Publication date: 1 April 1997

Joon Jong No and Brian H. Kleiner

As the manufacturing environment moves to computer‐integrated manufacturing and the products that are manufactured are diverse, conventional cost systems can report seriously…

12474

Abstract

As the manufacturing environment moves to computer‐integrated manufacturing and the products that are manufactured are diverse, conventional cost systems can report seriously distorted product costs. Discusses the solutions to these problems. Activity‐based costing, initiated and popularized by Robin Cooper and Robert S. Kaplan, can solve these distorted problems. Activity‐based costing (ABC) is defined as “the collection of financial and operation performance tracing the significant activities of the firm‐to‐product cost”. Discusses the ABC system design and ABC implementation. The five steps in the design of an ABC system are: aggregate actions into activities; report the cost of activities; identify activity centres; select first‐stage cost drivers; and select second‐stage cost drivers. The implementation plan consists of seven phases: an ABC seminar; a design seminar; design and data gathering; progress meetings; an executive seminar; result meetings; and interpretation meetings.

Details

Logistics Information Management, vol. 10 no. 2
Type: Research Article
ISSN: 0957-6053

Keywords

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