Activity based costing and a application at Batman Limpaş Product Company

ABSTRACT In the early 1960s, Peter Drucker noted that because traditional cost accounting systems do not examine cost of work activities, they cannot accurately reveal the true cost of products. His consern : Managers were making decisions about product cost using inaccurate cost accounting data. Recently, cost accounting reserachers have demonstrated that traditional managerial accounting systems fail to provide accurate product and service cost data. However, existing cost accounting systems do not provide the detailed quantitative cost data and business proces information that safety managers need. Without such data, they do not know what to focus decision making efforts in order to become more cost competitive In this new manufacture environments cost and production structure of the firms are differentiated. So indirect cost increase and more importance is attached to this expense. As a result inadequacies of the traditional cost systems observed in the distribition of overheads. Thus, the existing cost calculation systems have to be reorganized and as result a new system is developed.