search query: @freeterm Activity based costing / total: 5
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| Author: | Bromwich, M. Hong, C. |
| Title: | Activity-based costing systems and incremental costs |
| Journal: | Management Accounting Research
1999 : MAR, VOl. 10:1, p. 39-60 |
| Index terms: | Accounting Theories Cost accounting Production Technology |
| Freeterms: | ABC Activity based costing |
| Language: | eng |
| Abstract: | The article derives the essential conditions for activity-based costing (ABC) and for costs proportional with output volume to measure economic costs defined as incremental costs. Without this property these costing systems may give incorrect signals in decision making. In contrast to the existing literature, these conditions are found to be extensive and to require a fairly detailed exploration of the complex and multifaceted nature of technology. Conditions on technology to allow the usual definition of cost pools are shown to require that production involves neither cost complementaries nor non-complementaries, that inputs in a cost pool are independent of those in other cost pools and that technology takes the form that the input mixes for a cost pool are fixed and invariant with volume. |
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