ORIE 3150 November 3 2011 Slides

ORIE 3150 November 3 2011 Slides - ORIE 350 November 3,...

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ORIE 350 November 3, 2011 ABC
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You do not like these! Green Vistas Dylan Manufacturing Andy Reid Toys
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Activity-Based Costing In the 1980’s, increased competition from foreign companies identified a weakness in the product costing systems of many U.S. companies. Product costing systems did not accurately assign manufacture costs to product lines. These inaccurate product unit costs led to poor decisions. One was the inability to identify non- value added activities in the manufacturing process.
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Activity-Based Costing In the search for more accurate and more informative product costing, many organizations embraced Activity-Based Costing, ABC. It was first described by Robert S. Kaplan ORIE PhD ’68 and W. Bruns in the book Accounting and Management: A Field Study Perspective (1987).
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ABC’s Inception
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ABC is an approach to cost assignment that does the following: 1. Categorizes all indirect costs by identifying cost pools. 2.
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ORIE 3150 November 3 2011 Slides - ORIE 350 November 3,...

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