Applicability of an Activity Based Cost System in Government Service Organizations
AIR FORCE INST OF TECH WRIGHT-PATTERSONAFB OH SCHOOL OF ENGINEERING
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This research focused on the applicability of Activity-Based Cost ABC systems within government service organizations. ABC implementation efforts within other government organizations were first examined to determine what information short caused managers to consider ABC implementation. Next, archival analysis was conducted within the case study organization to determine if the same accounting information shortfalls existed. An ABC system was then implemented within the case study organization. ABC information was compared with information provided by the case study organizations fund accounting system. The case study organizations fund accounting system traced congressional appropriations to categories of expenditures for FY93. The fund accounting system reported aggregate category costs of the organization and department costs by category of expense. However, the organizations fund accounting system was not able to provide information to link expenditures across expense categories to business processes with the organization. Conversely, the ABC system reported activity costs, process costs, and product costs. The research concluded that ABC offers government service organizations non-budgetary information which may be used to target opportunities for process improvement or cost reduction. Activity Based Costing, ABC, Cost accounting, Fund accounting, Overhead allocation, Government service organizations, Cost visibility, Implementing ABC.
- Administration and Management
- Economics and Cost Analysis