Activity based costing for construction companies First edition.

Author

• Kim, Yong-Woo

Additional Author(s)

• Michaelis, Alexander
• Singh, M
• Shimamaura, Kiyoshi

Publisher

Hoboken, New Jersey: John Wiley & Sons, Inc, 2017

Language

English

ISBN

9781119194705

Series

v. 258

Subject(s)

• ACTIVITY-BASED COSTING
• CONSTRUCTION INDUSTRY-ACCOUNTING
• TECHNOLOGY

Notes

• Includes bibliographical references and index (161-165)

. .

Abstract

Activity Based Cotsting for Construction Companies provides guidelines on how overhead costs can be managed for using Activity Based Costing (ABC), providing gains in contractor competiveness. Illustrated with a range of case studies and examples it also presents a map that shows construction contractors how to implement ABC to calculate overhead costs accurately, identifying non or low-value added operations which can then be improved.

Physical Dimension

Number of Page(s)

1 online resource (xi, 165 p.)

Dimension

-

Other Desc.

-

Summary / Review / Table of Content

Preface ix
1 Introduction
1 1.1 What comprises costs in a construction company?
2 1.1.1 Construction costs (project costs)
3 1.1.2 Overhead costs in a construction company
3 1.1.3 The cost classification in use and the duality of overhead costs
5 1.2 Overhead costs in new business environments
6 1.3 Role of overhead cost management
10 1.3.1 Overhead costing system should provide accurate costing on cost objects
10 1.3.2 Overhead costing system should contribute to reducing total costs without sacrificing value
11 1.4 Structure of this book
11 References
12 2 What Is Activity-Based Costing?
15 2.1 Traditional accounting method: resource-based costing with volume-based allocation
16 2.1.1 Resource-based costing
16 2.1.2 Overhead costs allocation
17 2.2 What are the problems with the current method?
18 2.2.1 Is the current method contributing to reducing total costs?
19 2.2.2 Does the current method provide accurate pricing?
19 2.3 What is activity-based costing?
20 2.3.1 Definition
20 2.3.2 Characteristics of ABC
21 2.3.3 Objectives of ABC system
25 2.4 Implementing activity-based costing
26 2.4.1 Develop an activity-based costing charter
26 2.4.2 Define cost objects
27 2.4.3 Identify activities
28 2.4.4 Assign resource costs to activities
29 2.4.5 Assign activity costs to cost objects
32 2.5 Chapter summary
35 References
36 3 Managing Overhead Costs in Construction Projects
39 3.1 Project overhead costs as profit points
40 3.2 Implementing ABC to manage project overhead costs
42 3.3 Case study: xx Commercial Complex
42 3.3.1 Developing an activity-based costing charter
43 3.3.2 Workshop 45 3.3.3 Defining cost objects
46 3.3.4 Identifying activities
47 3.3.5 Assigning resource costs to activities
48 3.3.6 Assigning activity costs to cost objects
53 3.4 Using ABC data for managerial purposes
58 3.4.1 Evaluating management areas with activity analysis
64 3.4.2 Evaluating subcontractors
68 3.5 Chapter summary
70 References
70 4 Managing Your General Overhead Costs
73 4.1 General overhead costs
74 4.2 Managing general overhead costs
75 4.2.1 Accurate general overhead allocation
75 4.2.2 Providing a process view for process improvements
79 4.3 Does current practice for managing general overhead costs work?
80 4.3.1 Resource-based costing
80 4.3.2 Volume-based assignment
80 4.4 How can ABC be implemented in managing general overhead costs?
82 4.4.1 Case study: xx Construction (general contractor)
82 4.5 How can ABC data be used in managing general overhead costs?
92 4.5.1 Cost driver analysis 93 4.5.2 Profitability analysis for each project
93 4.5.3 Profitability analysis for each market sector
97 4.5.4 Profitability analysis for each customer
104 4.6 Chapter summary
105 References
105 5 Managing Overhead Costs in a Fabrication Shop
107 5.1 Rebar supply system
108 5.2 Case study: PQR Construction Inc.
111 5.2.1 The rebar fabrication shop's cost structure
111 5.2.2 Allocation of rebar fabrication shop's costs to projects
113 5.3 Analysis using traditional rebar costs allocation
113 5.3.1 Identify cost objects and direct costs
114 5.3.2 Identify the overhead costs to be allocated and calculate the allocation base
114 5.3.3 Calculate the overhead costs allocated to each project
116 5.4 Analysis using activity-based costing
117 5.4.1 Determining system objectives and defining cost objects
118 5.4.2 Identifying resources and activities
119 5.4.3 Assigning resource costs to activities
120 5.4.4 Determining a cost driver for each activity
122 5.4.5 Calculating a unit rate of activity costs (cost driver rate) and allocating activity costs to cost objects 124 5.5 How can ABC data be used for managerial purposes?
125 5.5.1 Accurate cost information through overhead cost allocation
125 5.5.2 Cost information on processes
127 5.5.3 Cost driver analysis
129 5.5.4 Ways to reduce overhead costs
130 5.6 Chapter summary
130 References
132 6 Activity-Based Costing in Your Organization
133 6.1 The benefits of the ABC journey
134 6.2 Implementation roadmap for ABC
138 6.2.1 Concept-level roadmap
138 6.2.2 Implementation roadmap for a focused application
139 6.2.3 Phase 1. Planning stage: preparing for your ABC journey
140 6.2.4 Phase 2. Execution stage: developing your ABC system
144 6.2.5 Phase 3. Internalization stage: final tune-up
154 6.3 Common mistakes in the journey
156 6.3.1 Beginning your ABC journey without strong commitment from top management
156 6.3.2 Beginning your journey with poorly defined objectives and scope
157 6.3.3 Developing a task force that does not have the necessary authority
157 6.3.4 Developing more cost objects than needed
158 6.3.5 Making activities ambiguous
158 6.3.6 The effect of distorted time-effort % assigned to activities
159 6.3.7 Choosing cost drivers that are hard to measure
159 Index
161

Exemplar(s)

#	Accession No.	Call Number	Location	Status
1.	00995/19	657.869042 Kim A	Online !	Available