Comparison Activity Based Costing, Time-Driven-ABC and Lean Accounting
Anneke Zwart, Student (University), Netherlands, Moderator
In the article "Activity Based Costing, Time-Driven Activity Based Costing and Lean Accounting: Differences Among Three Accounting Systems", 3 ways of accounting are compared. The comparison is made on three factors: 1: Decision making, 2: Financial reporting and 3: Operational Control and Improvement.
1. Decision Making:
Decision making takes place at a product level in both ABC and Time Driven ABC. In other words, the cost of completing a certain activity are allocated to the product itself.
For example, under ABC managers found out that low volume and complex products often results in additional and increasing cost on these products. These managers started to make otter decisions and changed their strategy based on knowledge gained from ABC. They recognized that high-competitive and low complex products are more competitive.
In contrast, Lean Accounting does not focus on the product itself, but rather on the overall value chain. This means tha...