Book Description
COST MANAGEMENT emphasizes that changing conditions often require a change in systems. Emphasizing this point stresses the dynamic and exciting nature of the field. By taking a systems approach -- one that first covers functional-based cost and control and then activity-based cost systems -- students understand how to understand and manage any cost management system.
Customer Reviews:
TO BUY OR NOT TO BUY; THAT'S A QUESTION!.......2007-03-16
The text is pretty comprehensive and covers the subject of Cost Management broadly and deeply. Since there are not too many textbooks on the topic; therefore, authors are admired for their devoted efforts they put into. The publisher should understand the matter inside the book and manage the cost of this book and make it afforable to the students.
For students, it's tough beginning before learning "Cost Management", the book incurs too much cost and puzzles students how they should manage their own budgets. Anyway, it might be the strategy of the authors or the publishing company to begin the lessons from the sale. As one scholar said, "Experience is a tough teacher, which gives exams first and teaches lessons thereafter."
As far as the contents are concerned, the book is highly recommended, but at a lower price. Thank you for your time for reading this review.
Filled With Useless Information.......2006-09-01
If you want to wade through useless babble to get to the actual cost accounting, go at it. However, you'll probably buy this book anyway if you have an unscrupulous accounting professor who received a gift basket from the publisher.
In other words, it's useless to the student. However, I'm sure its very profitable for the publisher and the authors.
FOR THE PRICE, THIS BOOK SHOULD BE BETTER.......2006-03-23
This book should have been written better when you consider its expensive price tag. However, the review excercise at the end of the chapter is extremely helpful. I would recommend the book if serious improvements are made. Overall, it is not that bad.
Want to Cheat Someone.......2005-09-30
I made a mistake and chose the book they listed in the Amazon.com. When the book arrived, I saw that what they have listed was only a Study Guide from a really old edition. I must say that they have said this on the listing. That was my mistake. But I wrote them back that I do not want this book, and want to return it. But they do not accept the return and refund of money. They do know that it is hard to find someone again doing this mistake. I looked at the book. This is $ 10 worth, not more. And impossible to sell again. I am a student. I do not have so much money to afford the required book. So I got really frustrated and faced losts of problems in the following weeks and spent a lot of time and energy to get the right book. It is a really sad story and an experience for me. I hope the seller is right know enjoying my $ 139.71.
Too much info........2005-01-04
Too bad we're stuck with whatever book the professor assigns. Often reads like the authors needed to write 1,000 pages, regardless of the complexity of the material. I caught them several times referring to the same item with different terms. In-class instruction on methods will save you a ton of time.
Book Description
In the classroom, activity-based costing (ABC) looks like a great way to manage a company's limited resources. But executives who have tried to implement ABC in their organizations on any significant scale have often abandoned the attempt in the face of rising costs and employee irritation. Time-Driven Activity-Based Costing is the solution to the problems associated with large-scale ABC implementation. In this book, Kaplan and Anderson offer a revised model where managers can estimate the resource demands imposed by each transaction, product, or customer, rather than rely on time-consuming and costly employee surveys.
In their new model, Kaplan and Anderson focus on the two parameters managers need to estimate: how much it costs per time unit to supply resources to the business activities (the total overhead expenditure of a department divided by the total number of minutes of employee time available) and how much time it takes to carry out one unit of each kind of activity (as estimated or observed by the manager). Rather than endlessly updating and maintaining ABC data, this book with allow managers to spend their time addressing the deficiencies the model reveals: inefficient processes, unprofitable products and customers, and excess capacity.
Kaplan and Anderson lead the discussion of Time-Driven ABC in the first seven chapters, followed by individual cases studies of actual implementations by Acorn consultants in diverse settings.
Customer Reviews:
Great Service.......2007-05-29
Product purchase acknowldgement was near immediate, billing timely, receipt of product within three days and the exact product ordered received. Excellent.
Time-Driven Activity-Based Costing.......2007-05-13
I finished reading this book by Bob Kaplan - TIME-DRIVEN ACTIVITY-BASED COSTING last week.
Its a great book for folks familiar with the basic concepts and applications of Activity-based Costing/ABC. In a way Kaplan makes an apology to readers of his earlier books and ardent fans of ABC, for making their lives difficult with the practical implementation approaches for ABC, and offers to make up for it by proposing a change to the new approach called Time-driven Activity-based Costing or TDABC. Personally I would have preferred the term "Capacity-driven Activity-based Costing".
Ofcourse one cannot help but be sympathetic to Bob Kaplan. Having interacted with him in the past, I had an opportunity to see at close range the genius of this man and the range of his knowledge. The book is certainly a big leap in our knowledge-base and tools for managing for managing companies better.
Kaplan aso originated another methodology "THE BALANCED SCORECARD" (BSC), several books on the subject, and co-founded another firm to offer servies around it. He is however, no longer associated with the firm in any management capacity, and the firm is financially troubled.
I recommend Kaplan's BSC books wholeheartedly, but if you are looking to implement at your organizations, I would recommend inviting select independent consultants who have more experienced at this, than the one's available at this firm.
Professionals with a serious interest in TDABC could also do well to reach out directly to Bob Kaplan and his new firm (The Acorn Group), and his former students for consulting advise.
TDABC - a very interesting book.......2007-05-12
This book has given me a great insight in an easier way to allocate resources down to costumers and products using Time-driven cost driver rates.
However, I am a bit sceptical about the Capacity Cost rate, which seems to be the key element to this models success... especially the way the authors describes the way to calculate this rate.. But with some methodical procedure behing when implementing the model, it is possible to get good results.... that's my experience
All in all, it is a great book about the fundamentals when wanting to use TDABC in your business.
Product Description
The most effective new cost management tool in years, activity-based costing enables you to eliminate hidden costs company wide and achieve remarkable new efficiency and profitability. This guide spells out how to use and profit from this powerful cost management techniques. Well-known ABC consultant Michael OGuin shows how to cut thousands of dollars in overhead and improve your product lines. Production processes. Pricing. Sourcing. Marketing. R&D. Capital Investment decisions. Dozens of case studies show these techniques in action. Youll find out how to set more profitable pricing policies that reflect all of your costs; the one factor that causes the majority of defect costs and how to eliminate it in your own operation; what discounts are really appropriate for large orders; six critical ways to slash the costs of serving your customers (and why most companies overlook them); the two hidden costs that managers in process manufacturing usually overlook; how to assign scrap costs down to products, parts, and vendors; five simple ways to measure customer satisfaction and pinpoint areas for improvement; and much more!
Customer Reviews:
Excellent Cost Management Tool.......2006-10-03
The author did a good job of coming up with a user friendly book on Activity-Based Costing (ABC). ABC is critical in alerting managers of the major and subsidiary drivers of costs. Many companies, large and small, have benefited from employing ABC techniques.
The book is readable by both the expert and novice in accounting. The novice will benefit from the detailed introduction into accounting systems and the concept of ABC. The author then methodically explains how costs can be allocated to products and services.
Those managers in the manufacturing industry will benefit the most as the book has a manufacturing bias, although the author did his best to also make the book relevant to those in the service industry. The various case studies and practical examples reinforce the message and help the reader in consolidating the understanding of ABC.
This is a recommended book that helps the reader to learn and comprehend the important technique of ABC that should enable companies to eliminate hidden costs and be more efficient and competitive.
Using ABC to think about your business.......2000-04-02
O'Guin takes a manufacturing perspective in his lucid explanation of activity based-costing, a management planning tool aimed at discovering what your true costs are by essentially assigning overhead costs to products and customers. The idea is that the more you know about your costs, the better able to compete. The book is ideal for consultants who need a quick read on the process, or managers thinking of implementing the system and require some overall familairity.
He does not totally ignore service businesses either. Very ably, he shows the theoretical underpinnings behind ABC, and points to many examples of "big league" companies, like GE and Hewlett-Packard that have used this method in order to understand the primary and secondary cost drivers.
The first third of the book mixes a history lesson on traditional accounting system with an introduction to ABC. The intro seems a little bit long, and I found myself wishing that he would get to the design and implementation of the system (which is the reason I was reading the book-part of a redesign consulting contract).
The author rarely speaks down to his audience. In fact, unlike many systems type books I have read in the last few years, O'Guin is able to continually build on what is presented previously in the book without endless looping. He assumes a level of intelligence and interest which you will find yourself thanking him for when you are trying to figure out how to allocate the cost of the bolt to the large customer shipping cost for the new product line 3rd shift, or some such permutation.
The second half of the book gets more into the nuts and bolts, so to speak, and describes how ABC might work in a typical firm. I imagine many of the readers will be of the small manufacturing bent, and this book really answers most of the questions you would have. The next step would probably be to talk to someone that has actually implemented the system.
The final third of the book deals with the strategic outlook for American industry and how ABC can be used as a management tool to increase competitiveness. The author never gets too preachy and mixes a good deal of his opinions with common sense and practical examples. Finally, the Appendix consolidates much of what he has been saying into charts and summations. In addition, the book provides the sources much reference material - something for every taste.
ABC is a system that may seem like learning a foreign language to the initiate. O'Guin does an excellent job of providing the basics. He gets you up to speed quickly and leaves you with enough information to have a basic understanding of ABC and its implementation. Highly recommended.
Book Description
A practical guide to the ABCs of ABB
This unique resource takes an in-depth look at creating value through activity-based budgeting (ABB). As most organizations are dissatisfied with some aspects of their performance, ABB has become an increasingly popular process for which many companies are abandoning traditional methods that no longer meet their demands. Emphasizing the importance of budgeting by activities and features rather than by cost elements, Driving Value Using Activity-Based Budgeting offers a complete overview of feature costing, a technique used in conjunction with ABB, as well as the underlying principles of ABB, including linking strategy to activities, forecasting revenue, capacity management, and gap analysis. With numerous examples and case studies, it shows how to use state-of-the-art tools for achieving strategic goals, such as customer survey, core competency analysis, benchmarking, house of activities, reverse engineering to cascade strategy so everyone can act to create value for the organization.
In today's highly pressurized business environment, creating value is the number one priority for organizations. The key to achieving this is having a budget and accounting system that supports long-term goals. More and more organizations are now turning to activity-based budgeting (ABB), an innovative approach that can help organizations become more competitive by linking the budgeting process to organization strategy. Explaining the importance of budgeting by activities rather than by cost elements, this groundbreaking resource—the first book of its kind—is a practical how-to that covers the essentials of Driving Value Using Activity-Based Budgeting.
Beginning with an overview of the fundamentals behind driving value, James Brimson and John Antos examine what exactly value is, how it is created, and why traditional planning and budgeting often lead to the destruction of value. Following a clear outline of the problems posed by the traditional budgeting process, the authors go on to explain that many companies have contemplated abandoning it altogether. In doing so, however, they must set performance targets and identify actions to achieve the targets: "Once those actions are implemented, there is a need to monitor the execution. Therefore, to drive value creation, organizations are implementing activity-based budgeting (ABB)." This comprehensive guide offers in-depth coverage of ABB and feature costing, a technique used in conjunction with ABB. ABB creates value by translating the business strategy into the activities necessary to implement that strategy. Feature costing creates value by understanding sources of product and customer variation and relating this variation to expected workload. Along with the benefits of using ABB and feature costing, Driving Value Using Activity-Based Budgeting addresses such essential topics as:
- Translating strategy into a process and activity framework—performing activities and cross-functional processes that support strategy and assessing current performance against strategic goals
- Forecasting revenue, volume, and workload—customer demographics and needs, the competition exploding a bill of activities, determining workload for special projects
- Capacity management—capacity defined, managing capacity, capacity management methodology, handling excess capacity
- Getting started—creating a business process budget, budget review panels, rank and select activities, cost budgeted activities
Filled with numerous examples and case studies, a complete glossary, and an appendix of target-setting techniques, this is must reading for everyone in your organization since all participants must continually ask themselves how they create value.
Average customer rating:
- Excellent Book on Activity-Based Pricing
- Activity Based Costing Success Story
- A Must Read for Manufacturers
- Valuable insights into profitable pricing
- Excellent!
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Pricing for Profitability: Activity-Based Pricing for Competitive Advantage
John L. Daly
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Similar Items:
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The Strategy and Tactics of Pricing: A Guide to Growing More Profitably (4th Edition) (Pie)
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The Price Advantage (Wiley Finance)
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Pricing on Purpose: Creating and Capturing Value
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Winning the Profit Game: Smarter Pricing, Smarter Branding
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Pricing Strategy: An Interdisciplinary Approach
ASIN: 0471415359 |
Book Description
Three things can happen when establishing a product price. A price set too high is a lost sale that could have been profitable at a lower price. A price set too low is rewarded with unprofitable work. Only when a price is set appropriately does a company make both a sale and a profit. Just as activity-based costing and activity-based management revolutionized the cost accounting world, activity-based pricing will bring a disciplined approach to developing pricing. Activity-based pricing examines the relationships between price, cost and sales volume and how this relationship effects profitability. Pricing for Profitability joins the disciplines of marketing, economics, business strategy, engineering and cost accounting to achieve maximum profitability.
Customer Reviews:
Excellent Book on Activity-Based Pricing.......2006-10-15
John Daly came up with a well written book that is interesting and informative on activity-based pricing. This book complements my knowledge and expertise on activity-based costing and I now know how to develop my prices based on a disciplined methodology for fixing the price.
John Daly avoids the mistake of focusing of maximizing revenue, advocated by some marketing professionals but rather puts the focus where it belongs namely maximizing profitability and ultimately shareholder value.
Any manager with responsibility for pricing will benefit immensely from reading this book.
Activity Based Costing Success Story.......2003-03-26
We have used the concepts outlined in John Daly's book to develop an activity based costing model. In fact, it has proven to be so useful that we are in its third revision. It is has been a critical tool for us to remain profitable during these difficult economic times. I do not know how we got along with out it!
A Must Read for Manufacturers.......2003-01-30
Pricing for Profitability has allowed our company to intelligently quote new projects and answer a critical question during price negotiations - "Should I walk?". We have also found the activity based pricing concepts useful for evaluating the countless cost down requests we get from our customer and understanding what we can and cannot do. I would recommend this book to anyone in a highly competitive, tight margin business.
Valuable insights into profitable pricing.......2003-01-16
John Daly has written an excellent book with important insights into the desirability and mechanics of using Activity Based Pricing to achieve a profit-driven pricing model.
Why is this important?
If you really understand and properly allocate your costs and use that understanding to develop an Activity Based Pricing model for your products and/or services then you are pretty well assured of profitability, particularly as you increase unit volume. Of course, this assumes you can sell at a price higher than your fully loaded, properly allocated costs.
As Mr. Daly clearly describes, traditional cost allocation methods (not to mention back of a napkin allocations) result in problematical cost distortions and lead to potentially serious pricing errors.
Anyone with profit and loss responsibility, or who would like to get there, would be well served to buy this book, read it and take it to heart. It is well written, coherent and was a pleasure to read. Daly has struck an excellent balance in that the book is not so filled with technical accounting/finance detail it is inaccessible to a non-accountant and yet it has sufficient substance to be of interest to accounting and finance specialists.
As investment bankers we receive financing requests from many companies seeking capital that are not profitable or not as profitable as they could be. Activity Based Pricing is one of the disciplines we are introducing to our clients and prospective clients to help them achieve profitability or become more profitable in order to better position them to compete for capital.
Excellent!.......2002-10-25
Mr Daly's writing style is smooth and casual, and the book is loaded with common sense. His discussion of overhead allocation problems certainly makes the point that GAAP accounting practices lead to serious errors in cost accounting.
Full disclosure: I personally prefer an engineering model or standard cost approach, reality-checked with what might be called sampled-ABC: old fashioned time and motion studies.
Book Description
* A practical, cost-effective guide to ABC for small to medium companies.
* Identifies the key cost related issues in organizations and shows how to develop a cost-flow structure that reflects the organization's cost behavior.
* Feature an ongoing case study throughout the book documents the model-building process.
* Provides a spreadsheet model blueprint that details data flows.
* Shows how a cost model of an organization can be developed using basic spreadsheet software on a PC.
Customer Reviews:
Very detailed.......2002-10-25
Hicks has a lot to offer in this book on activity-based costing, however it is not an easy to read. It very quickly dives into the weeds of detail. I think this is a very good second book to read on Activity Based Costing, because it goes into the details of how to actually implement a system. I would recommend that you first read Kaplan's "Cost and Effect," to get a good grounding in the fundamentals before reading this book.
Must Buy for ABC.......2001-11-14
This is a fantastic book on the subject of ABC. The costing model constructed in the book goes into just enough detail to give you a practical foundation for actual implementation, without getting lost in minutiae. At just the right times, the author also reminds you about the big picture and doesn't let you go away thinking correct decisions can all be boiled down to exercises in number-crunching. This is a must-buy, if you're serious about implementing ABC in your organization.
It really makes it work.......2000-04-20
Activity-Based Costing: Making it Work for Small and Mid-Sized Companies, is a very well written and usefull handbook to design and implementation of Activity-Based Costing. It provides: a general description of key concepts of ABC, a practical guide to design of ABC system in the company, as well as description of any potential problems concerning implementation of ABC. I am working as a financial consultant (in Warsaw), and this book has helped me to help many companies that were loosing their cost-effectiveness. I think, that the author should have added some 100 pages to the book, and defined - described some aspects of Activity-Based Management - although that could have been too technical for most of the readers. Overall, I think that the book contains most of the knowledge needed for successful design & implementation of ABC. It really worked for me...
Doug Hicks - ABC Guru.......2000-03-05
This is a model of clear and effective writing and teaching. Certainly one of the best accounting books I've ever read, it gives you the tools to start ABC analysis at once and never strays into jargon. The many examples of different company types and the simple to use and understand spreadsheet analysis keeps you focused on the theory of ABC rather than minute details of allocations. A book to keep on your desk.
Literally breaks ground!.......2000-02-26
I can not quite imagine a single decision made in any company that does not concern cost. And, when it is about accurate costing, I can not imagine another book on business that can better assist than this one.
First, the author defines the concept, states the reasons why Activity Based Costing should be implemented in every company, and then thoroughly shows you how to do it. Since the main step-by-step example in the book concentrates on a small manufacturing organization, those who are applying the concept to service organizations may have a harder time making the translation to their specific situations. Still, I don't think that will be much of an issue. The book is very well-written and must be digested by every professional with a passion for improving their company and seize a competitive advantage.
Book Description
Proven strategy for reducing production and operating costs while increasing profits
As the growth of the Internet shifts power to consumers, the pressure on companies to keep prices low will continue to mount. Increasingly corporations are relying on "margin management" and supply chain management as a means of keeping prices low while raising profits. Activity-based costing and management (ABC/M) data is key to succeeding in both these critical management strategies. This book explains how executives can effectively use the information furnished by cutting-edge ABC/M systems. The author, an acknowledged expert in the field, clearly defines the ABC/M system and explains how to use the information it provides for best results. He provides a rational framework for understanding the fifteen key defining characteristics of ABC/M and arms readers with an ABC/M Readiness Assessment test along with extremely user-friendly exhibits.
Gary Cokins (Far Bingham Farms, MI) is Director of Industry Relations at ABC Technologies, the world's leading supplier of activity-based information software. He is an internationally recognized expert, speaker, and author.
Customer Reviews:
Using ABC to manage your business.......2007-01-24
The author did a good job of coming up with a user friendly book on Activity-Based Costing (ABC). ABC is critical in alerting managers of the major and subsidiary drivers of costs. Many companies, large and small, have benefited from employing ABC techniques.
The author methodically and succinctly discusses and explains activity based-costing, a management planning tool aimed at discovering what your true costs are by essentially assigning overhead costs to products and customers. The idea is that the more you know about your costs, the better able to compete.
The author rarely speaks down to his audience. In fact, Gary Cokins is able to continually build on what is presented previously in the book without endless looping. This makes the book readable by both the expert and novice in accounting. The novice will benefit from the detailed introduction into the concept of ABC. The author then methodically explains how costs can be allocated to products and services.
This is a recommended book that helps the reader to learn and comprehend the important technique of ABC that should enable companies to eliminate hidden costs and be more efficient and competitive.
A great place to start.......2006-04-11
First, the author Gary Cokins has practical experience in ABC/M that spans a significant amount of the evolution of this practice. His book, Activity-Based Cost Management strikes a solid balance between theory and application helping the reader make progress and understand why. The author also connects the topic to many important contemporary issues including the internet, software, lean and six sigma. This is a great starting point for anyone.
Great starting point and continuing reference.......2002-12-21
This book is an excellent resource for learning and understanding ABC accounting. Unlike many web articles and white papers, Gary's book is a practical not academic approach from someone who has been there, done that, and has the t-shirt. It's filled with lots of explanatory diagrams which help to visualize the concepts presented and are useful when presenting on a high-level to executives under time constraints for reading. Chapter 1 clearly presents ABC basic concepts while Chapter 2 is a direct follow-on expanding the depth and breath of those basic concepts. Chapter 3 addresses the question that all senior management wants to know: Are all your trading partners worth it to you? Subsequent chapters focus on typical ABC modeling applications most relevant to organizations. Chapter 6 gives a very good cross-comparison of project/work order costing vs. ABC that is very helpful to project-centric organizations in understanding how ABC differentiates itself. Chapter 7 succinctly places ABC software in the reengineering software spectrum without getting lost in a technological morass. Chapter 9 addresses rapid prototyping for getting initial results from the methodology that can be tweaked iteratively to grow a more sophisticated ABC model. In conclusion, I highly recommend this book and look forward to Gary's "ABC Management - Making it Work" which is next on my ABC must-read list.
Outstanding Executive's Guide to Understanding ABC/M.......2002-11-13
Gary does a wonderful job in explaining not only what is ABC/M but also why it is needed is today's competitive environment. I enjoyed the discussions on defining and measuring capacity as well as the cost of quality. If you're looking for a book that describes ABC/M and it's uses, this is it!
Activity-Based Cost Management.......2002-09-05
it is an amazing book on the subject. it provides valuable practical insights to issues faced by any practitioner of ABC/M.
Anyone who is closely related or has been involved with the implementation of ABC or wants a good understanding of ABC should definitely read this book.
Book Description
Two of the most innovative thinkers in the field present a work that represents the single best resource for understanding and implementing activity-based cost management. Kaplan and Cooper reveal that most companies don't know how to measure accurately, influence, or understand the fundamental cost drivers in their businesses. They then provide a detailed and comprehensive blueprint that will enable managers to make better decisions and to promote organizational learning and improvement.
Cost and Effect takes the management, finance, and accounting fields to an entirely new level, as the authors demonstrate how the principles of activity-based costing and other advanced cost management techniques, such as target and kaizen costing, can drive business performance. Using lively examples from a variety of leading companies worldwide--including Siemens, Hewlett-Packard, AT&T, the Swedish wire manufacturer Kanthal, Kirin Beer, and Procter & Gamble--they show how to create integrated, knowledge-based systems that provide meaningful information on current and past performance.
The innovation systems described in
Cost and Effect will help you:
* Determine where improvements in quality, efficiency, and productivity will have the highest payoffs.
* Assist front-line employees in their learning and improvement activities.
* Make better product mix and capital investment decisions.
* Negotiate more effectively on price, product features, quality, delivery, and service to promote win-win relationships with your customers.
* Choose low-cost suppliers who are truly low cost, not just low price.
* Design products and services that meet customers' expectations-and that can be produced and delivered at a profit.
* Integrate your activity-based cost system into reporting and budgeting processes to reveal the sources of excess capacity.
Everyone involved in running a business-from general managers and strategic planners to financial executives, IT professionals, and operations managers-must read this book to learn how innovative cost and performance measurement systems can enhance their organizational profitability and performance.
Customer Reviews:
What's good in it?.......2004-10-25
First of all, this book doesn't give the pleasure of good reading. C'mon, what kind of pleasure do you expect from a 500 pages book with very small fonts?
I would like to review on pages 183-189 regarding case at Kanthal. It said that according to ABC calculation, Kanthal has found that customer #199 records loss, unfortunately customer #199 is in the top three in terms of sales volume. If ABC is really a good tool, then Kanthal should fire customer #199. But Kanthal didn't do that. They don't believe in ABC?
Customer #199 implemented JIT and they've got substantial improvement in productivity and efficiency. With JIT concept they place order to Kanthal in small quantity and frequent orders. According to ABC, this makes the cost for Order-to-cash activities at Kanthal is quite high, so that it eats the margin.
The funny thing, the book said JIT is appropriate in Japan, not in Sweden. Don't they look at automotive industry around the world that successfully implement JIT?
So what's the solution described in the book? The solution is to cut the cost of order-to-cash activities by using electronic B2B concept. And it claims that customer #199 turns to be profitable for Kanthal after that. So simple and...so wrong!
Maybe ABC calculation shows that result is good at Customer #199 level. But still, the company bottom line remains the same. Do they cut sales persons' salary? No. Do they fire a sales person who handle customer #199? No. Do they reduce transportation cost? No.
Probably by using B2B, there's small fraction of cost saving on order processing activities, but it won't be significant enough to increase the net profit for the company.
If B2B does reduce the cost of order processing cost significantly, why they don't use it for all customers?
BEST ANALYSIS OF ACTIVITY BASED COSTING AND HOW TO GUIDE.......2003-11-23
Kaplan and Cooper have put together an outstanding guidebook for managers to follow in order to reap the most significant benefits from activity based costing and other cost management techniques. The great merit of this book is that it does not preach to the reader the latest management fad, but rather goes through a thorough analysis of budgeting processes, highlighting benefits and drawbacks of each. They do not claim ABC is the best approach, and even praise some simpler methods that are more adequate for certain companies. Instead, they point to the circumstances in which ABC can provide outstanding results to companies.
The book structured first with an analysis of the most often used systems of managerial cost accounting. It highlights the shortcomings of these, proceeding then to present certain productivity improvements that could contribute to performance. These are mostly related to the quality movements (TQM, 6 Sigma, etc), which are presented in a very understandable way. These are complements to the existing usual cost management systems. These improvements can be made even without implementing ABC systems.
Then the authors proceed to describe activity based costing and its benefits in terms of choosing customers, suppliers, and product breadth. They present many examples that would be very relevant to any practitioner, in industry or service. There is a specific section focusing on services, which makes the appropriate adaptations to the systems for the peculiarities of it.
Overall, an outstanding work, to help anyone involved in cost management, whether they are interested in activity based costing or more traditional standard costing methods.
The very best book on activity-based management........2002-10-25
I have read this book cover to cover and have re-read chapters. Kaplan ensures that you grasp the fundamental concepts by keeping things simple. He illustrates the concepts with easy to understand examples. I gained very little knowledge from the first 3 ABM books I read, but after reading "Cost and Effect," I felt that I had a good enough grasp of the fundamentals to actually implement a costing system.
Cooper and Kaplan: my heroes.......2001-12-27
After reading several academic papers concerning activity based costing I still wasn't convinced about the usefullness of the methodology. After reading Cost & Effect I revised my opinion on Cost Management. This book gives all the answers to effective Cost Management. It takes you from the ABC Age to the Activity Based Management Age and clearly helps you to understand what costs are alle about. Once you really understand the topics of this book you will be able to face and manage costs in whatever business you are in. Read it!
Evolving Toward Better Financial Information and Actions!.......2001-10-05
Cost & Effect will most appeal to those who have had extended experience with Activity-Based Costing (ABC) or operate in manufacturing industries.
If you are interested in learning more about Activity-Based Costing, this book is not the best choice for you. Professor Kaplan has co-authored books that explore this subject in much greater detail.
Most people set as their initial priority the need to have accurate financial reporting for the entire enterprise. Falling below that level of effectiveness is Stage I in the terms of this book. Once you have that financial reporting done accurately, you are at Stage II. But you know almost nothing about how to manage your costs better. In order to do that, you will need to establish ad hoc financial reporting processes designed to help your organization learn from its experience and identify opportunities for improvement, built around Activity-Based Costing (ABC). ABC is simply a way of more accurately applying overhead costs back to activities and then processes that permits accurately understanding more about which combinations of products and services and customers are profitable and which are not. Then, within each activity, you can also see the inefficiencies in what you are doing that present opportunities for improvement. The book also has a nice discussion of Kaizen costing that is widely used in Japanese companies looking for on-going cost improvements, based on Professor Cooper's research. There are a few case histories to illustrate the principles, but most will find these insufficient to guide them through the process. In other books, Professor Kaplan has pointed out that there is a lot of acquired art in the subject and you probably need help to get it right. I concur. Once you have ABC operating in stand-alone systems, you are at Stage III.
At this point, you will have a financial reporting system that is separate from the ABC system. How do you put them together? That the subject of chapter 14, which is the key value-added part of this book. You will see what the systems architecture and process flow needs to be in order to combine ABC with Enterprise-Wide Systems (EWS) of the sort that many large companies have invested in during recent years. Putting the two together will greatly improve planning, budgeting, design of new products and services, and operational improvements. Chapter 15 expands into the area of how to apply the combined system to budgeting and transfer pricing. Combing ABC and EWS puts you at Stage IV, a level rarely reached today.
The book's main message is that it's a mistake to try to go from Stage II directly to Stage IV. There's a lot of experimentation and mistakes that you can benefit from in an extended Stage III. I agree again, based on my experience with ABC.
The one caution you should have about ABC in this context is that if you are going to radically change your business model every 2-5 years as many companies are, Stage IV is probably unattainable and undesirable. You can't hold back business model innovation for better cost systems. The next business model innovation will probably give you better costs than tweaking the current business model with ABC will.
Seek out the fastest route to progress, and do more of it!
Average customer rating:
- Its a great book to use it as reference
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The Price Waterhouse Guide to Activity-Based Costing for Financial Institutions
Julie Mabberley
Manufacturer: McGraw-Hill
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Binding: Hardcover
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ASIN: 0786301430 |
Book Description
The Price Waterhouse Guide to Activity-Based Costing for Financial Institutions show how firms can use the breakthrough concept of activity-based costing (ABC) in the same way that other companies have--to increase profits by managing all activities from the top down, more efficiently. This book explains the methods and technologies of this profit-enhancing technique, with detailed guidelines that help firms plan for costs before they occur, rather than simply monitoring them. Readers will find: An explanation of why costs are incurred; Practical Steps for putting ABC to work in a financial instituion; Dozens of practical cases that illustrate the situations in which the concepts can be applied.
Customer Reviews:
Its a great book to use it as reference.......1999-12-21
This book it's an excellent reference when you're implementing an ABC/M project in a Bank. It has a complete list of cost drivers that are also used as performance metrics.
It's an excellent example of how can ABC/M be used also with services not just in manufacturing
Book Description
New costing procedures for a new economic age
Increasing global competition is causing upheaval in every area of industry and commerce. An explosion in the use of advanced technologies is continuing to fundamentally revolutionize the way we go about doing business. These factors are in turn driving dramatic reductions in product life cycles (the average product life cycle is now well under five years) and exerting tremendous pressure on profit margins. The effect has been to substantially change cost structures with their traditional focus on direct labor and arbitrary allocation of overhead. Yet we continue to measure cost in the old way.
Now, here's a book that shows you how to update your accounting procedures in order to effectively accommodate these significant changes. Step by step, Activity Accounting: An Activity-Based Costing Approach describes activity accounting in a clear, concise manner. It emphasizes the strengths and benefits of an activity-based approach to business management and demonstrates how you can apply activity accounting to your organization.
Activity-based accounting is an essential tool for running your business in the 90s. This book is a must-have tool for learning how to master it.
Customer Reviews:
Recommended.......1997-06-17
Without question, if you want to know where all the money's going (especially in companies of 100+) employees, ABC is the tool to use. Mr. Brimson's book is one of several books I have read on the topic and it is also, in my opinion, the best. By investing one or two evenings reading this one book, you will have an opportunity to understand not only what it is (and what it is not) in plain English, but you may also be capable and confident enough to participate in the process as well
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- Currency Overlay: A Practical Guide
- Dictionary of Accounting Terms (Barron's Business Dictionaries)
- EasyScript Express How To Take Fast Notes in a Matter of Hours (Easyscript Express How to Take Fast & Legible Notes)
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- Essentials of Corporate Finance (Mcgraw-Hill/Irwin Series in Finance, Insurance, and Real Estate)
- Essentials of Health Care Finance
- Essentials of Health Care Finance, Fifth Edition
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Books Index
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