Kuma, Clayton (2013) Integrating activity - based costing (ABC) and theory of constraint (TOC) for improved and sustained cost management. Journal of Modern Accounting and Auditing, 9 (8). pp. 1046-1058. ISSN 1548-6583
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Abstract
Implementing effective cost management approaches has recently gained momentum due to intense competition
and increasing customer demands. Moreover, effective cost management approaches have contributed to firms’
competitive advantage in relation to cost leadership strategy. Consequently, firms have implemented contemporary
cost management systems, such as activity-based management, business process re-engineering, life-cycle costing,
target costing, and theory of constraint (TOC), to enable them to become low-cost producers and compete
effectively and sustain their performance. Furthermore, focusing on cost management to improve profitability has
led to the integration of activity-based costing (ABC) and TOC. Therefore, the aim of this study is to review
literature and discuss how integration of ABC and TOC can result in improved and sustained cost management.
While these methods have different approaches in addressing cost management, treating them as complementary
cost management approaches can result in improved cost management due to improved product costing, improved
cost reporting, improved product-mix decisions, and improved cycle-time management. Improvement in cost
management will then result in sustained cost management. Sustained cost management is further enhanced with
the investment in information technology that supports cross-functional decision making to continue creating
customer and shareholder value to remain competitive in the market.
| Item Type: | Journal Article |
|---|---|
| Subjects: | H Social Sciences > HF Commerce > HF5601 Accounting |
| Divisions: | Faculty of Business and Economics (FBE) > School of Accounting and Finance |
| Depositing User: | Clayton Kuma |
| Date Deposited: | 27 Mar 2014 22:38 |
| Last Modified: | 22 Oct 2024 10:32 |
| URI: | http://repository.usp.ac.fj/id/eprint/7286 |
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