MODERNIZING MANAGEMENT ACCOUNTING BY THE ABC METHOD

In recent years the relationship between direct and indirect costs in total costs has changed a lot, due to the technological evolution in the sense of increasing the share of indirect costs. Thus was imposed the orientation of cost calculation to a method to allow the identification of the origin, analysis and control of indirect costs. In order to control the overheads it is necessary to be aware of the causal factors that generate resource consumption. The method that best meets these requirements is the ABC (Activity Based Costing) method. After clarifying the concepts of “activity” and “driver”, this paper presents the methodology used in the ABC method. The allocation of indirect costs on products, works, and services is calling for the activities of the company. The last part of the paper is limited to a case study conducted in a company producing automotive parts.