Measure Costs Right: Make the Right Decisions

Name: Measure Costs Right: Make the Right Decisions (English version)
SKU: 88503

Cooper, Robin; Kaplan, Robert S.

Product #:88503

Supplier:Harvard Business Impact

Discipline:Accounting

Details:Article (PDF) • 8 pages • 1988-09-01

Subjects:

Cost systems Activity-based costing Cost accounting Pricing strategy Cost analysis Costing Accounting methods Sales and marketing Finance and investing Accounting

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Managers in companies selling multiple products are making strategic decisions about pricing and product mix with distorted cost information, detecting the problem only after their competitiveness and profitability have deteriorated. An alternative is activity-based costing. Virtually all of a company's activities exist to support the production and delivery of today's goods and services. Companies need not scrap their official cost systems to use activity-based methods. The two can exist simultaneously.

Learning Objectives

To appreciate the power of activity-based costing to provide a more accurate view of product costs and profitability.