Activity ? based cost management structured onto activity maps and an application

In the middle of 1980's the Activity-Based Costing Tool (ABC) had been generated with a focus on the processes rather than the output. ABC was created to meet the requirements that the traditional management and cost accounting tools were lacking. When it was realised that ABC was not just a simple cost assignment tool, the other Activity-Based techniques were defined. Those Activity-Based techniques were applied to the production sector first and then to the service companies for managerial purposes.While the labour intensiveness in the health care sector still exists, it has been gaining a more technology intensive frame. This causes the health care investments and expenditures to rise as well as the health care costs to get more complicated. While the public sector health care investments and expenditures are rising, the number of private health care organisations keeps growing and the competition within the sector gets stronger. In this context it is possible to state that having more realistic cost information about the health care services provided by an organisation is vital. This can be achieved in a more accurate way by the Activity-Based techniques. However, the success of Activity-Based methods will largely depend on the consistency of the activity maps prepared and the activity analysis performed beforehand.In this study Activity-Based Cost Management structured onto activity maps has been investigated using a case study in order to research its applicability on health care organisations. The conceptual frame of the Activity-Based techniques defined in the literature, their prospect in health care organisations and the general designing and application processes are explained in the first two sections. In the third section, the designing and application processes of Activity-Based techniques, specifically in health care organisations, is discussed with a focus on forming the activity maps. In the last section a case study is performed about its application in The Bilecik Oral and Dental Care Centre.Key words: Activity Map, Activity Analysis, Activity Cost Analysis, Activity-Based Costing, Activity-Based Cost Management, Activity-Based Management, Activity-Based Budgeting, Cost Driver, Activity Driver.