Home  Journals  Economic Analysis: Theory and Practice  12(177) - 2010 April

The computation of profit from product sales based on accounting and the allocation of costs among activities and business processes

Available online: 16 April 2010

Subject Heading: ADMINISTRATIVE CALCULATION

JEL Classification: 

Today many organizations apply simple approach towards accounting and allocation of overhead costs which can lead to product cost distortions and mistakes in management decisions. This paper considers some details of using regular and management accounts for recording cost information that is created in the new systems of management accounting - ABC and its modification TDABC as well as respective product cost computations and the preparation of management statement on profit from operations. Presented in this paper case demonstrates the significant advantages of these management accounting techniques in comparison to traditional simplified approach towards accounting and allocation of overhead costs.

Keywords: Activity Based Costing, Time Driven Activity Based Costing, ABC, TDABC, Cost Allocation

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ISSN 2311-8725 (Online)
ISSN 2073-039X (Print)

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