Innovative Production Machines and Systems Conference

As an alternative to the traditional cost-allocation method of accounting, activity-based costing is gaining popularity as a management tool for making informed strategic decisions. This paper illustrates the benefits of activity-based management and presents an example of how activity-based costing concepts were integrated into a model of a composite assembly shop. The model demonstrates how analysing production processes to gain an understanding of resource and activity relationships improves cost driver visibility. Adding the distinction between value-added and non-value-added tasks to the activity analysis will lead to improved decision-making capabilities.

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PPT_21.wmv	3.68 MB

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