Comparision of as a new cost system non allocated costs management with traditional cost managagement systems

Explicit Cost Dynamics is a nonallocation cost management system that provides cost information based purely on bottom line cost dynamics. With the bottom line as a basis, the implementation of ECD strives to provide decision makers with the relevant tools and information to understand the bottom line impact of past, current and future activities. It provides explanations regarding how to effevtively bid on projects without allocating and stil ensure the desired bottom line. It explains why a plant manager?s approach is beter for the company from a bottom line even though the accountant?s measures suggested otherwise. It provides decision makers with the necessary information to operate their organizations without the confision created by allocating costs.As ECD consept agrees, many scholars have suggested that allocation does not work. The solution however often has been to create beter allocation models rather than to eliminate the model altogether. ECD will provide solutions by looking at the cost dynamics of an organization and building tolls and measures around bottom line cost dynamics to ensure that the bottom line impact of every decision made will be known. ECD is not mean to be a compliment to allocation based accounting. It is meant to eliminate it. This study is an introduction to the ECD concept anda associated measures that will allow for more insight into the bottom line cost dynamics of the organization.