Write a thoughful argument about topic

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Reference no: EM131841479

INSTRUCTIONS: make a thoughful argument about topic.

Kaplan and Cooper argue that if higher-level, nonvolume related costs such as batch level costs etc are allocated to the product unit level the resultant unit cost will be largely meaningless.

Clearly, their approach to ABC cannot be reconciled to that of the Japanese companies. There is, however, no necessary contradiction between the Kaplan/Cooper approach and that of Zimmerman.

Zimmerman merely introduces a category of long-run volume related costs which are effectively ignored in Kaplan and Cooper's analysis.

The only necessary difference is that, with Zimmerman, the unit level cost would include a proxy for the 'hidden' costs of using labour that arise in the longer term.

There would appear to be a good case, therefore, for including Zimmerman type allocations in a Kaplan and Cooper style ABC system.

Reference no: EM131841479

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