Activity-Based Costing in Government: Possibilities and Pitfalls |
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| Authors: | Richard E. Brown Mark J. Myring Cadillac G. Gard |
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| Affiliation: | Professor of accounting at Kent State University, Department of Accounting, Kent State University, Kent, OH 44242. E-mail address: .;Graduate student in the doctoral program at Kent State University, Department of Accounting, Kent State University, Kent, OH 44242. E-mail address: .;CPA, is controller of the City of Wooster, Ohio, 538 N. Market Street, PO Box 1128, Wooster, OH 44691. Tel: (330)263-5218. |
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| Abstract: | Activity-based costing (ABC) is at the center of the larger management perspective known as activity-based management, or ABM. Despite its popularity in the literature, relatively little is still known about the details of ABC, especially in government circles. There are many unanswered questions relating to the details of how to go about implementing ABC, its possible uses, and its costs and benefits. Indeed, it is still unclear to many whether it is even appropriate to use ABC in government, given the reality that many governmental programs do not sell their services This article attempts to address these concerns by presenting the conceptual underpinnings and details of ABC, contrasting the system with more traditional cost accounting systems, discussing the fit of ABC in government, and considering in some detail how one small city might benefit from implementing ABC. |
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