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Activity‐based costing
Author(s) -
Eggers John L.,
Bangert Charles E.
Publication year - 1998
Publication title -
journal ‐ american water works association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.466
H-Index - 74
eISSN - 1551-8833
pISSN - 0003-150X
DOI - 10.1002/j.1551-8833.1998.tb08454.x
Subject(s) - activity based costing , business , goods and services , productivity , business process , process management , work (physics) , cost driver , business process management , cost accounting , service (business) , total absorption costing , process (computing) , quality (philosophy) , industrial organization , operations management , risk analysis (engineering) , marketing , computer science , work in process , accounting , economics , engineering , mechanical engineering , philosophy , epistemology , market economy , macroeconomics , operating system
Activity‐based accounting provides a true measure of services and goods and helps target business processes that need improvement. The water supply industry must respond to the competitive challenges of the current business climate by promoting efficiency and lowering costs. Many techniques are available to help managers decrease costs and increase productivity and customer service. None of these methods will work, however, unless an organization can identify and measure the cost and performance of the activities that constitute its core business processes. Activity‐based costing (ABC) is proposed as a methodology for measuring and managing gains in process efficiency. A proven operational technique, ABC measures the cost of activities, provides true costs of goods and services produced, and tells a manager where to look to improve business processes and employee performance, reduce costs, and enhance the quality of products produced and services performed.