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- Title
APPLICATION OF ACTIVITY- BASED COSTING ON REINFORCING STEEL BAR MANUFACTURER.
- Authors
Wei Tong Chen
- Abstract
Reinforcing steel bar manufacturers are important upstream material suppliers for the construction industry. While indirect costs account for a relatively low proportion of overall manufacturer costs for steel products, incorrect cost apportioning methods result in miscalculated indirect manufacturing costs, and this cost calculation issue is worth investigating. This study analyzes the traditional cost systems used by certain steel manufacturers, and subsequently introduces Activity-Based Costing (ABC) to compare the effectiveness gap of the two approaches. Results showed that companies using ABC to implement cost controls have greater clarity of the relationship between resources, operations and costs, clearly showing the consumption status of each cost, and depicting the apportionment of production costs. ABC entails complex operating procedures. For the construction industry to use ABC as a cost control system, a holistic approach should be taken to carefully assess organizational and project relevance.
- Subjects
CONSTRUCTION industry customer services; ACTIVITY-based costing; INDUSTRIAL costs; COMPLEX compounds; COST control
- Publication
International Journal of Organizational Innovation, 2016, Vol 9, Issue 1, p228
- ISSN
1943-1813
- Publication type
Article