Activity Based Costing (ABC): Is It a Tool for Company to Achieve Competitive Advantage?
Bibliographic record
Abstract
Most of the companies today have no idea what their products cost them to make. Usually companies think they do know but unfortunately they are not correct. This misunderstanding has led many business organizations to make decisions that are bad to the business. They might abandon profitable products in favor of products that are losing money. However, the companies’ cost information just does not help! Generally managers receive cost information that is misleading and harmful, and make them do the wrong things in their work place. This damaging information comes from full absorption costing (both fixed and variable costs) of calculating total product costs. The costing system calculates product costs by allocating a portion of the overhead or indirect costs to each products being manufactured. The amount of the overhead cost allocated is based on the amount of direct hours or direct labor costs required to make the product. This method of allocating is a good approach of allocating overheads many years ago when direct labor was the largest portion of cost required to make a product and when overheads were small. The problems associated with this allocation methods were highlighted in the late 1980s with the publication of the influential book “Relevance Lost; the Rise and Fall of Management Accounting” by Tom Johnson and Bob Kaplan. Johnson and Kaplan showed that the historical development of cost and management accounting has given rise to inappropriate methods of allocating overhead costs. These methods of allocation lead to cost distortion. This resulted in managers making the wrong strategic decision. The overall objective of this study is to investigate and assess how ABC provides the company with additional competitive edge to compete in the globalization environment. The principle of activity-based costing has been a much talked about tools in the 1980s and 1990s. But is ABC really the strategic tool to achieve competitive advantage as expected? How the companies should approach the implementation of ABC in order to achieve the required results. What the companies should expect from the ABC? What is the future of ABC?
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.004 | 0.014 |
| Meta-epidemiology (narrow) | 0.001 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.003 | 0.006 |
| Science and technology studies | 0.002 | 0.004 |
| Scholarly communication | 0.013 | 0.008 |
| Open science | 0.001 | 0.002 |
| Research integrity | 0.002 | 0.002 |
| Insufficient payload (model declined to judge) | 0.013 | 0.004 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".