The Complete Guide to Activity-Based Costing [Hardcover]

Michael C. O'Guin (Author)

Book Description

Publication Date: October 1, 1991 | ISBN-10: 0138533180 | ISBN-13: 978-0138533182

The most effective new cost management tool in years, activity-based costing enables you to eliminate hidden costs company wide and achieve remarkable new efficiency and profitability. This guide spells out how to use and profit from this powerful cost management techniques. Well-known ABC consultant Michael O’Guin shows how to cut thousands of dollars in overhead and improve your product lines. Production processes. Pricing. Sourcing. Marketing. R&D. Capital Investment decisions. Dozens of case studies show these techniques in action. You’ll find out how to set more profitable pricing policies that reflect all of your costs; the one factor that causes the majority of defect costs and how to eliminate it in your own operation; what discounts are really appropriate for large orders; six critical ways to slash the costs of serving your customers (and why most companies overlook them); the two hidden costs that managers in process manufacturing usually overlook; how to assign scrap costs down to products, parts, and vendors; five simple ways to measure customer satisfaction and pinpoint areas for improvement; and much more!

Editorial Reviews

About the Author

Michael O'Guin helps a variety of companies cut costs and achieve world-class competitiveness with the same ABC techniques in this extraordinary guide. He was formelry President of Activity Costing Systems, where he showed such companies as Boeing, Eli Lilly and Allied Signal how to achieve dramatic inventory reduction and profitable new manufacturing and strategic planning. O'Guin is a porminent member of various professional organizations and lectures frequently across the country.

Product Details

• Hardcover: 384 pages
• Publisher: CCH, Inc. (October 1, 1991)
• Language: English
• ISBN-10: 0138533180
• ISBN-13: 978-0138533182
• Product Dimensions: 9.5 x 7.3 x 1.4 inches
• Shipping Weight: 2.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #516,704 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

13 of 13 people found the following review helpful:

4.0 out of 5 stars Using ABC to think about your business, April 1, 2000

By 

Jack Northrup (St. Johnsbury, Vermont) - See all my reviews

This review is from: The Complete Guide to Activity-Based Costing (Hardcover)

O'Guin takes a manufacturing perspective in his lucid explanation of activity based-costing, a management planning tool aimed at discovering what your true costs are by essentially assigning overhead costs to products and customers. The idea is that the more you know about your costs, the better able to compete. The book is ideal for consultants who need a quick read on the process, or managers thinking of implementing the system and require some overall familairity.

He does not totally ignore service businesses either. Very ably, he shows the theoretical underpinnings behind ABC, and points to many examples of "big league" companies, like GE and Hewlett-Packard that have used this method in order to understand the primary and secondary cost drivers.

The first third of the book mixes a history lesson on traditional accounting system with an introduction to ABC. The intro seems a little bit long, and I found myself wishing that he would get to the design and implementation of the system (which is the reason I was reading the book-part of a redesign consulting contract).

The author rarely speaks down to his audience. In fact, unlike many systems type books I have read in the last few years, O'Guin is able to continually build on what is presented previously in the book without endless looping. He assumes a level of intelligence and interest which you will find yourself thanking him for when you are trying to figure out how to allocate the cost of the bolt to the large customer shipping cost for the new product line 3rd shift, or some such permutation.

The second half of the book gets more into the nuts and bolts, so to speak, and describes how ABC might work in a typical firm. I imagine many of the readers will be of the small manufacturing bent, and this book really answers most of the questions you would have. The next step would probably be to talk to someone that has actually implemented the system.

The final third of the book deals with the strategic outlook for American industry and how ABC can be used as a management tool to increase competitiveness. The author never gets too preachy and mixes a good deal of his opinions with common sense and practical examples. Finally, the Appendix consolidates much of what he has been saying into charts and summations. In addition, the book provides the sources much reference material - something for every taste.

ABC is a system that may seem like learning a foreign language to the initiate. O'Guin does an excellent job of providing the basics. He gets you up to speed quickly and leaves you with enough information to have a basic understanding of ABC and its implementation. Highly recommended.

1 of 1 people found the following review helpful:

5.0 out of 5 stars Excellent Cost Management Tool, October 3, 2006

By 

Elijah Chingosho "Dr Elijah Chingosho" (Nairobi, Kenya) - See all my reviews
(REAL NAME)   

This review is from: The Complete Guide to Activity-Based Costing (Hardcover)

The author did a good job of coming up with a user friendly book on Activity-Based Costing (ABC). ABC is critical in alerting managers of the major and subsidiary drivers of costs. Many companies, large and small, have benefited from employing ABC techniques.

The book is readable by both the expert and novice in accounting. The novice will benefit from the detailed introduction into accounting systems and the concept of ABC. The author then methodically explains how costs can be allocated to products and services.

Those managers in the manufacturing industry will benefit the most as the book has a manufacturing bias, although the author did his best to also make the book relevant to those in the service industry. The various case studies and practical examples reinforce the message and help the reader in consolidating the understanding of ABC.

This is a recommended book that helps the reader to learn and comprehend the important technique of ABC that should enable companies to eliminate hidden costs and be more efficient and competitive.