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BENEFITS OF DOCUMENT
  1. Learn what has caused interest in ABC/M and how an ABC/M model is designed.
  2. Learn how to calculate profit and loss statements for customers, Use ABC data for process improvement, and to perform "predictive accounting" for capacity-sensitive driver-based budgets / rolling financial forecasts, what-if analysis, and outsou
  3. Understand how to overcome implementation barriers to ABC/M such as behavioral resistance to change and fear of being measured and held accountable.

DOCUMENT DESCRIPTION

Critics have claimed that traditional managerial accounting is at best useless and at worst dysfunctional and misleading. Today's general ledger and budgeted spending systems support departmental and "stovepipe" managerial philosophies. In contrast, activity-based costing (ABC) information supports process-based thinking. ABC is a key component of the increasingly popular enterprise and corporate performance management (EPM/CPM) systems.

Cross-functional processes are now recognized as the integrating theme for how work gets done, how outputs are produced, and how customers get served. Only ABC can bring truly accurate fact-based measures and visibility to costs. ABC does not use broadly averaged cost allocations, but rather traces cost using cause-and-effect activity cost drivers. The resulting cost visibility informs manager about what things costs and more importantly why things have costs. ABC goes beyond product costing to also measure channel and customer profitability.

ABC also helps reduce costs and improve productivity by reporting per-unit costs that can be used as benchmarks and to monitors cost trends. ABC can also associate costs with value, quality, and waste, with their strategic importance, with their level of performance, and other "attributes" of work. All of this cost and trait data are further translated into which products, channels, customers or internal company-sustaining workforce staff cause and consume all of the resources......and in exactly what proportions.

Ultimately cost data is simply a means-to-ends where the ends are the decision-making of the organization. Today an emerging focus is to become a "learning organization." Unlike traditional accounting reports to which managers react by being happy or sad, ABC data makes them smarter!

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Source: Activity-Based Cost Management (ABC/M) PowerPoint document

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Activity-Based Cost Management (ABC/M)

Sold by Gary Cokins (this author has 7 documents)

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This business document is categorized under the function(s): Corporate Finance   Strategy, Marketing, & Sales  

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File Type: PowerPoint (ppt)

File Size: 4.9 MB

Number of Slides: 101

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This product contains a supplemental PDF document.

Initial upload date (first version): Apr 29, 2018
Most recent version published: Apr 30, 2018

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