On The Development Of A Combined Activity-Based Costing (ABC) And Economic Value Added (EVA) System For Small Business

Topics:
Strategic Management Tools
Tags:
Activity Based Costing,
Economic Value Added,
Economic Value Added Analysis,
Economic Value-Added Analysis,
Finance,
Managerial Accounting,
Small Business,
Strategic Management
Source:
University of Pittsburgh

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Overview: Activity Based Costing (ABC) system traces cost incurred to the activities involved therein. It explores the relationship between activities and costs. ABC refines costing systems by focusing on individual activities as the fundamental cost object. Such a costing method improves cost measurement by organizing information around activities. Economic Value Added (EVA) analysis is an analytical tool towards computation of accrued shareholder value in the organization. It measures the surplus value created by an investment. The computation of this value is imperative in optimizing an organization’s financial strategy within the strategic management framework. The paper envisages a combined ABC and EVA system for small business and discusses the development of the same.

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Format: HTML | Date: Jan 2003 | Pages: 15


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