Costing from the Perspective of Decision-making

Document Type : Original Article

Authors
1 Full Professor Finance & Accounting. Chairman of IFEA & IMAA
2 Ph.D Student of Islamic Azad University, Science & Research Branch
Abstract
In this paper, we describe five types of product costing systems: traditional volume-based system, activity-based costing system, time-driven activity-based costing system, resource consumption accounting and Light ABC. We illustrate the commonalities and differences among these systems and promot critical and comparative understanding of the various product costing approaches.
We evaluate the systems along multiple dimensions: (1) the cost of implementation and maintenance, (2) the ability to provide decision-relevant data, and (3) managing the demand for resources. We identify where individual systems excel and finally leverage this insight to develop a blended system combining the best features of each of these approaches.
Keywords