Cost Systems Design Book

List of Figures viii

List of Tables ix

Acknowledgements x

Introduction 1

Part I Theoretical Approach

1 The Rationale behind Costing Systems 5

1.1 Managing resources 5

1.2 Interacting with the environment 7

1.3 Orienting behaviour 8

2 The General Parameters of Modelling 11

2.1 Choice of language 11

2.2 The Perimeter 13

2.3 The Status 16

2.4 Units of analysis 17

3 The Creation of Architecture 21

3.1 Modalities of the constitution of the unit of analysis 21

3.2 Hierarchization and allocation 30

3.3 Bases for cost allocation 31

4 A Panorama of Existing Systems 33

4.1 Broad categories of systems 33

4.2 Analysis of the two black boxes 37

4.3 Conventional systems 37

4.4 Non-conventional systems 42

5 Analysis of Relevance 46

5.1 Internal relevance 46

5.2 External relevance 54

5.3 Relevance from the viewpoint of behaviour orientation 57

6 From Enterprise Model to Cost Calculation 60

6.1 The tradition of unit costs 60

6.2 Unit cost in non-volumetric context 63

6.3 Predominance of a single cost object 64

6.4 Multiplication of cost objects 65

7 Widening of Perimeters in New Models 67

7.1 Total cost over the life cycle 68

7.2 Non-transactional costs 72

7.3 Composite costs 73

8 Articulation with Other Tools of Control and Management 75

8.1 Key Indicators as support for cost value dialogue 75

8.2 Presentation of key indicators 79

8.3 Costing models and quality management 80

8.4 Costing model and stakeholders 81

9 Evolution of Costing Systems 83

9.1 The slowing down of evolution 83

9.2 Promising trends in evolution 84

10 Costs and their Utilization 87

10.1 Price and unit cost 87

10.2 Information concerning costsand cost management 90

Conclusion 93

Appendix 95

A.1 Subsidization 95

A.2 Basic data 96

A.3 Effect of diversified activities in a cost centre 98

A.4 Effect of relative costs of activities 101

A.5 The effect of batch size 102

Part II Presentation of the Cost Systems Families

11 Cost Systems: Synthetic Presentation and Quantified Illustrations 111

11.1 Cost architecture 112

11.2 Common characteristics 112

12 Conventional Systems 121

12.1 Direct value added (DVA) 121

12.2 Theory of Constraints (TOC) 128

12.3 Variable Cost 133

12.4 Direct Cost 139

12.5 Basic Full cost 146

12.6 All direct 152

12.7 Hierarchized responsibility centres 158

12.8 Value added units method (VAU) 166

12.9 Homogeneous cost pools method 179

12.10 Hierarchized homogeneous cost pools method 187

13 Non-conventional Models 195

13.1 ABC Model 000 196

13.2 ABC Model 001 208

13.3 ABC Model 010 - functional 221

13.4 ABC Model 011 (hierarchized and value creation oriented) 233

13.5 ABC Model 100 244

13.6 ABC Model 101 254

13.7 ABC Model 110 (functional) 264

13.8 ABC Model 111 276

13.9 MBM (Management by Means) 285

13.10 Tables of synthesis 300

Bibliography 307

Index 309