Part 1 Section D.3.2. Activity-Based Costing 活動基準原価計算


  • 棚卸資産評価
  • 原価情報の歪み
  • The traditional cost system
    • was designed to value inventory in the aggregate and not relate to product cost information.
    • uses a common departmental or factory-wide measure of activity, such as direct labor hours or dollars (now a small portion of overall production costs) to distribute manufacturing overhead to products.
    • Deemphasize long-term product analysis (when fixed costs become variable costs).
    • Causes managers, who are aware of distortions in the traditional system, to make intuitive, imprecise adjustments to the traditional cost information without understanding the complete impact.

Inventory valuation

  • meeting external reporting requirements for aggregate balance sheet valuation and income determination
  • providing monthly and quarterly reporting

Management control of operations

  • evaluating operations in order to quickly detect problems to allow implementation of corrective action
  • comparing costs against budget for monitoring

The purpose and characteristics of ABC

  • Purpose
    • differentiating costs between value adding and non-value adding activities.
  • Characteristics
    • costing products according to activities involved in the production process.

Benefits of ABC

  • Leads to a more competitive position by evaluating cost drivers, e.g., costs associated with the complexity of the transaction rather than the production volume.
  • Streamlines production processes by reducing non-value adding activities, e.g., reduced set-up times, optimal plant layout, and improved quality.
  • Provides management with a more thorough understanding of product costs and product profitability for strategies and pricing decisions.

The steps to implement activity-based costing

  1. Evaluation of the existing system to assess how well system supports the objective of an activity-based cost system.
  2. Identification of the activities for which cost information is needed with differentiation between value adding and non-value adding activities.