Resource consumption accounting and an application in a manufacturing company

Many accounting systems have been created and employed by companies as a result of cost research since the past centuries. Recource consumption accounting (RCA) is one of these systems. Traditional cost accounting systems employed in the past decades required a necessity for the resource consumption accounting system since they were not able to produce data needed by many companies. The RCA, on the one hand focussing on resources and on the other not allocating idle capacity costs to products, therefore, provides a strategic benefit to the companies. In this study, an investigation has been conducted on a company which belongs to shotgun manufacturing sector in Turkey. The data received from the company was analysed using the RCA system by creating resource pools. Then, the resource costs were allocated to activities using the RCA principles, idle capacity was identified, and costs regarding the idle capacity were determined. By doing so, the RCA system identifies production costs better, and directs the attention of management to both idle capacity and the costs incur as a result of the idle capacity. Key Words: Resources, resource consumption, production costs, idle capacity.