On the applicability of activity based costing as a planning instrument

Activity based costing (ABC) attempts to measure the impact of overhead costs. It thus seeks to support decisions that optimally allocate overhead capacities. To evaluate the applicability of ABC as a planning instrument, we discuss the allocation of capacities within the broad framework of producti...

Full description

Saved in:
Bibliographic Details
Published in:International journal of production economics 1998-05, Vol.54 (3), p.277-284
Main Author: Schneeweiss, Ch
Format: Article
Language:English
Subjects:
Activity based costing
Applied sciences
Approximation
Capacity adaptation
Exact sciences and technology
Operational research and scientific management
Operational research. Management science
Overhead costs
Planning. Forecasting
Studies
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Activity based costing (ABC) attempts to measure the impact of overhead costs. It thus seeks to support decisions that optimally allocate overhead capacities. To evaluate the applicability of ABC as a planning instrument, we discuss the allocation of capacities within the broad framework of production-investment models for which ABC can be considered as a simple approximation. For various parameter settings the validity of the ABC approach is investigated. It turns out that the optimality loss can be considerable.
ISSN:0925-5273
1873-7579
DOI:10.1016/S0925-5273(98)00003-6