How to Design and Implement an Integrated Activity-Based Costing and Economic Value Added System
نویسنده
چکیده
This paper describes how to design and implement an integrated the Activity-Based Costing method with the Economic Value Added performance measurement system to determine costs as well as measure performance. Motivation for switching to an integrated ABC-and-EVA system is presented. Pre-implementation and implementation steps are illustrated using data from an actual implementation of the system at a small design and manufacturing firm. Changes to product costs resulting from the inclusion of full capital cost are demonstrated. The impact of the increased reliability of cost information on the company’s decision-making, potential longterm business performance, and expected shareholder wealth creation is discussed.
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