Activity-Based Costing: Making it Work for Small and Mid-Sized Companies

Explains how to implement activity-based costing, offering tips for installation, plus the outline of a method that reforms cost accounting using traditional concepts, and a detailed case study that serves as a blueprint for the actual implementation of activity-based costing.

Looking for a practical, proven method to gain that crucial competitive edge for your company? It's as simple as ABC. Activity-based costing (ABC) is a decision support tool that gives you that needed edge through a greater under-standing of your product and process costs. In Activity-Based Costing: Making It Work for Small and Mid-Sized Companies, practicing accountant Douglas T. Hicks guides you through the process of adopting ABC and using it to improve the quality of your business's decisions.

Traditionally, cost accounting methods have been designed to determine the inventory value and cost of sales for an entire organization-- seldom providing accurate or relevant information for individual products or services. However, with ABC, businesses can now see dramatic improvements in both accu-racy and relevance when measuring product and process costs. Decisions based on this improved cost information will guide the business to an improved competitive position, both domestically and globally. If your company has between twenty and five hundred employees, it can greatly benefit from ABC without an overhaul of its current cost information systems.

Using an approach developed while solving problems for small and mid-sized companies, Douglas Hicks helps you sharpen your competitive edge while emphasizing the "total package" of cost information--not just its com-putational aspects--and steers you clear of the dangers encountered by measuring costs using generally accepted accounting principles. The result is a reader-accessible, comprehensive narrative covering every ABC element, including clearly defined instructions for building a cost accumulation and distribution model for any size business.

In this indispensable reference, Mr. Hicks discusses the logic of ABC and its cost flow-down steps, then clearly demonstrates the most appropriate ways for your business to change to multiple costing rates and bases. The ABC system is used to perform "what if" analyses, while several case studies are presented on developing cost flow-down structures. And by simply outlining the relationship between decision costing and long-term contracts, he easily illustrates which small and mid-sized businesses can benefit the most from ABC.

Owners, managers, controllers, accountants, and any executive involved with small and mid-sized companies will appreciate this book's practical, down-to-earth ABC methods. Its tested and proven theories and methods will help businesses of any size profit, by basing their decisions on facts, not fantasies. Activity-based costing is no longer an option when striving for the competi-tive edge in business--it is now a requirement. Even educators will find ways to incorporate ABC into existing cost accounting courses with this insightful and timely book.

Incorporating activity-based costing concepts into your business without relying on the usual complex ABC jargon can be a daunting task--even for the most experienced accountant. In Activity-Based Costing: Making It Work for Small and Mid-Sized Companies, professional accountant Douglas T. Hicks shows you how to sharpen your competitive edge while bringing you the "total package" of cost information--not just the computational elements. Using an approach developed while solving problems for small and mid-sized companies, Mr. Hicks has created a reader-friendly, comprehensive narrative covering every aspect of the ABC industry, including step-by-step instructions for building a cost accumulation and distribution model for any size business. With examples taken from Fortune 1000 companies, readers will find a wealth of information on ABC features, including: *The logic behind ABC and its cost flow-down steps *How to get the maximum benefits from ABC for your small or mid-sized business *Case studies on emerging cost flow-down structures *The most appropriate ways to change to multiple costing rates and bases *Using ABC to perform "what if" analyses *The danger of measuring costs using generally accepted accounting principles *Applying decision costing and long-term contracts to your business

If your company is looking to dramatically improve its current cost information systems, this book is a must-read. You can have that crucial competitive edge. Activity-Based Costing: Making It Work for Small and Mid-Sized Companies will show you how.