Product Profitability Model based on ABC and EVA

摘要：

The validity of product profitability analysis is dependent on the accuracy and completeness of cost information. Activity-based costing (ABC) can improve the accuracy comparing to traditional costing (TC), but it ignores the opportunity cost of the capital and loses the integrality of cost. Prior models based on either TC or ABC cannot consider the opportunity cost of assets and cannot provide the information of the idle cost of capacity unused. This paper constructs a product profitability model by combining the activity-based costing and economic value added theories in order to improve the accuracy and integrality of cost information. Specifically, by introducing an imaginary product, the model reveals the idle cost of unused resource and activities. Furthermore, a real case study is given to illustrate the model. The result shows the proposed model improves the accuracy and visibility of management’s product mix decision comparing to the existing traditional models.

关键词： Cost benefit analysis Activity-based costing (ABC) Economic value added (EVA) Profitability Analysis,product mix decision

作者: Junming YIN Pingxin WANG Chengjia WANG

作者单位: Nanjing Audit University,Nanjing,PRC;SIAS International University,Zhengzhou,PRC Hangzhou Dianzi University,Hangzhou,PRC SIAS International University,Zhengzhou,PRC

会议类型: 国际会议

会议名称: 工业工程与系统管理2007年国际会议(International Conference on Industrial Engineering and Systems Management)(IESM 2007)

会议地点: 北京

会议语种:英文

在线出版日期: 2007-05-30（万方平台首次上网日期，不代表论文的发表时间）