W3 Article Analysis Summary

W3 Article Analysis Summary - efficiency in the areas of...

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1 Article Analysis Summary Article Analysis Summary Activity-based costing: A proactive management tool Brandi Murobayashi ACC 349 May 22, 2011 Rod Walsh
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2 Article Analysis Summary The article “Activity-based costing: A proactive management tool” highlights the benefits of activity-based costing (ABC) for management. According to the Arney and Ralph, ABC provides management with better information in three areas: decision support, driver costs, and operational efficiency” (1994, p. 2). More accurate costs permits improved decision support. Management can use the information for pricing strategies, managing service/product lines, and make versus buying decisions. Driver cost information helps in pricing products/services, evaluating outsourcing decisions, and establishing performance measurements. Finally, understanding activity costs will help management improve operational
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Unformatted text preview: efficiency in the areas of performance measurements, process re-engineering, testing and prioritizing, cost improvement efforts, and value adding versus non-value adding analysis. This article gave me a more in-depth look at ABC and how it can help management decisions. ABC can give management a better picture of activity costs. This can definitely help management to improve on operational efficiency because they can easily identify costly activities/processes and re-engineer the process to make it more efficient. Not only can ABC help managers to improve processes but also can be used to give meaningful feedback to evaluate how an improvement effort is working. 3 Article Analysis Summary Reference Arney, D., & Sorice, R. P. (1994). Activity-based costing: A proactive management tool . Credit World , 82 (6), p.17. Retrieved from ProQuest database....
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