Aggregation in activity-based costing and the short run activity cost function

摘要: This paper first identifies the conditions that support construction of an aggregate output, i.e. under which a single measure output can be used to accurately determine cost object incremental costs within pool. is significant issue has not been fully explored in management accounting literature. Two are jointly necessary and sufficient. The one linear homogeneity property associated with each production function. condition ensures essential if reported by activity-based costing (ABC) system also relevant for decision?making. second all (cost object) driver rates given pool equal. guarantees function at activity depends on only driver. short run structure ABC introduced. It shown fundamental linearly between does generally hold run, even assuming technologies homogeneous. Only very particular conditions, such as when inputs combined completely fixed proportions, output.