Common Cents: How to Succeed with Activity-Based Costing and Activity-Based Management

by Peter Turney

Overview

"Marvelous! I read Common Cents on a recent cross-country flight and . . . I was mesmerized. Bravo!"

--Tom Peters, author of In Search of Excellence and Thriving on Chaos

The first edition of Common Cents was the world's bestselling book on Activity-Based Costing (ABC) and Activity-Based Management (ABM). This completely revised and updated edition uses numerous case histories and new implementation strategies to reflect today's transition from manufacturing to service, and explains how all professionals can use ABC and ABM to dramatically improve decision making.

Product Details

ISBN-13:	9780071735896
Publisher:	McGraw Hill LLC
Publication date:	05/17/2005
Edition description:	2nd ed.
Pages:	336
Product dimensions:	0.70(w) x 9.00(h) x 6.00(d)

About the Author

McGraw-Hill authors represent the leading experts in their fields and are dedicated to improving the lives, careers, and interests of readers worldwide

Table of Contents

	Preface to the Revised Edition	ix
Part 1	Why You Need Activity-Based Costing	1
Chapter 1	The Need for ABC Information	3
	Setting the Wrong Prices	4
	Focusing on the Wrong Markets	6
	Serving the Wrong Customers	6
	Designing Costly Products and Services	8
	Cutting Cost but Failing to Reduce Cost	12
	Not Controlling Government Spending	12
	Making Incorrect Sourcing Decisions	13
	Summary	18
	Key Terms	18
	References	19
Chapter 2	The Limitations of Managing with Accounting Information	21
	Managing in the New Millennium	22
	Accounting Measures Not Designed for Internal Business Intelligence	26
	The Death Spiral	35
	Summary	39
	Key Terms	40
	References	41
Part 2	Why Activity-Based Costing Is the Solution	43
Chapter 3	The ABC Innovations	45
	How ABC Gives You Accurate Cost Information	47
	The Drama of ABC	59
	Consistency with the Business Practices of Leading Organizations	66
	Summary	69
	Key Terms	69
	References	71
Part 3	What ABC Looks Like	73
Chapter 4	The ABC Model	75
	Early Activity-Based Costing	76
	Two-Dimensional Activity-Based Costing	79
	Summary	89
	Key Terms	90
	References	90
Chapter 5	The ABC Building Blocks	93
	The Cost Assignment View	93
	Time Equations	110
	The Process View	110
	A Manufacturing Illustration	112
	A Service Illustration	114
	A Government Illustration	115
	Summary	116
	Key Terms	116
	References	117
Chapter 6	Resource Planning and Time-Based ABC	119
	Resource Planning	119
	Time-Based ABC	125
	Summary	128
	Key Terms	128
	References	129
Part 4	Activity-Based Management	131
Chapter 7	Activity-Based Improvement	133
	The Link to ABC	134
	Activity-Based Management	134
	Improving Performance	139
	Reducing Cost the Old-Fashioned Accounting Way	145
	Reducing Cost the Activity-Based Way	145
	Summary	150
	Key Terms	151
	References	152
Chapter 8	The Tools of Activity-Based Management	153
	Strategic Analysis	154
	Value Analysis	158
	Cost Analysis	161
	Storyboarding	166
	Life-Cycle Costing	168
	Can ABC Be Used by Defense Contractors?	171
	Target Costing	172
	Summary	174
	Key Terms	174
	References	175
Chapter 9	Building the World-Class Organization	177
	Strategic Management	179
	Performance Management	185
	Supply-Chain Management	189
	Investment Management	192
	Summary	193
	Key Terms	194
	References	195
Chapter 10	Customer Profitability	197
	Deluxe Corporation	198
	Percival Foods	205
	Acting on Customer Profitability Intelligence	211
	ABC Analytics	213
	Summary	214
	References	214
Part 5	How to Implement ABC and ABM Successfully	215
Chapter 11	Convincing Management to Change	217
Step 1	Generate Interest	218
Step 2	Remove Barriers to Acceptance	221
Step 3	Obtain Management Commitment	227
	Summary	230
	Key Terms	231
	References	231
Chapter 12	Developing the Game Plan	233
	Formulate the Objectives	234
	Describe the Deliverables	237
	Set the Scope	237
	Create the Organization Structure	241
	Determine the Training Requirements	242
	Complete a Project Schedule	243
	Budget the Project Costs	244
	Summary	245
	Key Terms	246
Chapter 13	Gathering the Information	247
	How to Collect the Information	248
	How to Interview Successfully	252
	Getting the Data into the ABC System	258
	Summary	260
	Key Terms	261
Chapter 14	Designing the Model	263
	Identifying Activities	264
	Reconstructing the General Ledger	268
	Creating Activity Centers	272
	Defining Resource Drivers	274
	Determining Attributes	280
	Selecting Activity Drivers	281
	Designing Resource Planning and Time-Based ABC Models	284
	Summary	285
	Key Terms	285
	References	286
Part 6	How to Sustain the Success of ABC and ABM	287
Chapter 15	Continuous Results from ABC	289
	Keeping the Model Up-to-Date	290
	The Value Creation Process	291
	Performance Management System	292
	Summary	294
	Key Terms	294
	References	294
	Glossary	297
	Index	305