earticle

영어

Management accounting creates information within the organization to facilitate managers` decision and control processes. But today`s management accounting information, driven by the product and cycle of the organization`s financial reporting system, is too late, too aggregated, and too distorted to be relevant for manager`s decisions. It is argued that conventional cost system may report seriously distorted product costs if the products manufactured are diverse. Instead of focusing on units produced, activity-based costing(ABC) system focus on activities performed to produce products in a manufacturing process. Activities are classified in one of four categories : unit-level, batch-level, product-level, and facility-level activities. Indirect costs are assigned to products using cost dirivers that capture the underlying behavior of the cost that are being assigned. ABC systems report more accurate product cost and especially appropriate if collection of the additional data needed requires relatively little time and efforts, competition is high, and the company has a highly diverse product mix. ABC supports manufacturing excellence by providing information to facilitate making long-term, strategic decisions about such things as product mix, and souring. ABC allows product designers to understand the impact of different designs on cost and then to modify their designs accordingly. ABC also supports the quest for continuous improvement by allowing management to gain new insights into activity performance by focusing attention on the sources of demand for activities and by permitting management to create behavioral incentives to improve one or more aspects of manufacturing.