Costs activity-based costing

Model Conventional Cost Activity-Based Cost ... 

When estimating the operating and maintenance costs for various options, it is recommended that the actual activities which are anticipated are specified and costed. This will run into the detail of frequency and duration of maintenance activities such as inspection, overhaul, painting. This technique allows a much more realistic estimate of opex to be made, rather than relying on the traditional method of estimating opex based on a percentage of capex. The benefits of this activity based costing are further discussed in Section 13.0 and 14.0. 

Huiidal, M. S. 1997 Product Costing a comparison of conventional and activity based costing methods. Journal of Engineering Design, 8(1), 91-103. 

Roztocki, N. and Needy, K.L. (1998) An integrated activity-based costing and economic value added system as an engineering management tool for manufacturers. ASEM National Conference Proceedings, Virginia Beach, 1-3 October 1998, pp. 77-84. 

General Motors has assessed the required activity of a catalyst that costs less compared to the current state-of-the-art Pt activity based on these con-straints. i Assuming that the catalyst layer thickness could be increased to MOO pm from the currently used 10 pm, GM has calculated that the minimum volume activity (i.e., Acm ) for a cathode catalyst that costs less should be at least 10% of the current Pt activity. In reality, this seems rather generous, given the recent trend to reduce catalyst layer thicknesses to optimize high-current performances. The DoE has developed a series of volume activity targets for nonprecious metal catalysts, with the 10% of Pt activity target (300 Acm 3 at 0.8 V, H2/O2) necessary by 2015. 

Cokins G (2001) Activity-based cost management. John Wiley Sons, New York et al. 

Shapiro JF (1999) On the connections among activity-based costing, mathematical programming models for analyzing strategic decisions, and the resource-based view of the firm. European Journal of Operational Research 118 295-314... 

Activity-Based Costing (ABC) Activity-Based Budgeting (ABB)... 

Figure 18-3. Activities-based costing versus activity-based budgeting.

For these reasons, Activity-Based Costing (ABC), the most accurate method of cost analysis, is particularly helpful in identifying all of the individual costs of an operating practice or an event, such as a chemical spill. In analyzing a spill, for example, the audit team can attach a dollar value to waste of materials and labor, system changes, unused capacity, and the spill s myriad overhead costs, as well as corporate legal, PR, and other administrative support costs, all of which need to be carefully understood in considering process improvements. 

Resource items can be identified and measured using several different techniques, each having both positive and negative attributes. These techniques include (but are not limited to) direct measurement in clinical trials, " direct measurement in activity-based costing exercises, retrospective database assessment, and physician/healthcare professional... 

Cooper, R., The Rise of Activity Based Costing, Part I, Journal of Cost Management, Volume 6, Summer 1988. 

Development of Activity-based Cost Functions for Cellnlase, Invertase, and Other Enzymes... 

Level II (process planning and control) is where business process owners current business processes are planned and controlled, with methods for scheduling and capacity and (activity-based) cost analysis also available. Process monitoring lets process managers keep an eye on the states of the various processes. 

Metrics may also be indexed with respect to a manufacturing output, input, throughput, or batch size, as discussed in AUen and Rosselot (1997). Product-based environmental impact analysis requires activity-based inventory assessment (Stuart et al. 1998). Similar to activity-based costing (see Chapter 89), activity-based environmental inventory assessment recognizes the hieiarchy of impacts tmd assigns them proportionately to an activity such as a product or service. 

Activity-based budgeting is ideal for tracking plant engineering functions. Identifying activities actually performed along with the cost drivers aUows real-time information to be generated and problem areas identified quickly. Cost distributions between plant engineering and other departments can be done more equitably, and non-value-added activity can be spotted more easUy. 

Use activity-based costing to identify and eliminate non-value-added activity. 

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