Cost Accounting Term Paper

Excerpt from Term Paper :

Themido, I., A. Arantes, C. Fernandes & A.P. Guedes. (2000). Logistic costs case study: An

ABC approach. The Journal of the Operational Research Society, 51 (10): 1148-1157

Stable URL: http://www.jstor.org/stable/253927

The use of Activity-Based Costing (ABC) reflects the fact that indirect costs and overhead costs are often more draining to modern organizations than direct costs.

The article specifically discusses the use of ABC in terms of its use in costing logistics services.

Traditional costing in logistics uses the direct product profit-ability (DPP) methodology which is "to identify all the costs associated with a product or an order as it moves through the distribution channel" (Themido et al. 2000: 1149).

ABC identifies activities "that are responsible for costs and therefore consume resources, provides a cost flow assignment chain which enables the activity costs to be continuously re-assigned or imputed to the products, customers, or services that use the activity" (Themido et al. 2000: 1149).

The article concludes with a case study of ABC for a third party logistics operator in Portugal.

Analysis

The article compares and contrasts the use of ABC with traditional methods in logistics in a manner that is designed to be both persuasive and informative for individuals working in the logistics field.

The…

Sources Used in Document:

Reference

Themido, I., A. Arantes, C. Fernandes & A.P. Guedes. (2000). Logistic costs case study: An

ABC approach. The Journal of the Operational Research Society, 51 (10): 1148-1157

Stable URL: http://www.jstor.org/stable/253927

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