Using ABC to enhance throughput accounting: A strategic perspective

doi:N/A

eISSN: 1848-137X / ISSN: None

Journal of Cost Management

Volume 18, Issue 1 : 31-38

Review Article

Using ABC to enhance throughput accounting: A strategic perspective

Sidney J. Baxendale

P.S. Raju

Department of Accountancy, University of Louisville, United States; Marketing Department, University of Louisville, United States

Abstract

The utility of activity-based costing (ABC) for enhancing the management accounting information derived from a theory of constraint-based throughput accounting system is discussed. The enhanced management accounting system offers information, which supports strategic decision making regarding the development and promotion of new products. The major difference between ABC and TOC is found in the tracing of resource costs to activities, required by ABC but discouraged by TOC. Throughput per unit of product and activity-based costing information per unit of product are important items of management needed by marketing managers.

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