Re: Japanese Business Practices dje05@xxxxxx 13 Sep 1999 15:17 EST
Actually ABC is widely used in the USA as well, and AFAIK is generally considered a far superior method of cost accounting. Its the opposite of the notion of 'overhead' which tends, frankly, to lead to vague and possibly bloated admin-type costs. Using overhead-type cost accounting, costs can be hidden without anyone really knowing; nothing should be managed that way. The point of ABC is to discover the true cost of every product so that resources are concentrated on the most profitable ones, while unprofitable or less profitable ones are trimmed back, dropped, or whatever. ABC is very good at opening eyes!!! ---------------------- Forwarded by Daniel J. Egan/SSG/DLO/Wadsworth/DOH on 09/13/99 04:19 PM --------------------------- Greg Schmidt <xxxxxx@FAMU.EDU> on 09/13/99 12:20:18 PM Please respond to Research Administration Discussion List <xxxxxx@hrinet.org> To: xxxxxx@hrinet.org cc: (bcc: Daniel J. Egan/SSG/DLO/Wadsworth/DOH) Subject: Re: Japanese Business Practices Back in the late 80's and early 90's, Japanese firms bought into Activity Based Costing in a big way. In ABC, all costs are allocated to the products according to need, or hits, on administration and service centers, and charged to each unit produced. In this way, they can determine the exact cost of producing a specific quantity of a specific model. They can also find areas of administration that are not productive. They can also find products or styles of products that are not cost effective. If we did this, ancient american history wouldn't be taught because the cost per student would be so high. The closest we get to this is in Cost Centers for things like Computer Centers or Glass Blowing shops. "Herbert B. Chermside" wrote: > We are trying to do business with a Japanese firm. Although I have not > yewt met with them, the P.I. has. They seem to have a problem with F&A, > indirect, overhead, or whatever we name the general costs of doing > business. I cannot conceive it possible to operate a business, even in > Japan, without using this concept, so we need to describe it in their terms. > Does anyone out there have some familiarity with the techniques and terms > used in Japan for this? I think if we understand their culture in this > regard, we can start singing from the same hymnbook! > > Thanks!! > > Chuck > > Herbert B. Chermside, CRA > Director, Sponsored Programs > Virginia Commonwealth University > > ====================================================================== > Instructions on how to use the RESADM-L Mailing List, including > subscription information and a web-searchable archive, are available > via our web site at http://www.hrinet.org (click on "Listserv Lists") > ====================================================================== -- Greg Schmidt Manager, Contract & Grant Accounting Florida A&M University 201 FHAC Tallahassee, FL 32307-3200 DUNS: 623751831 College of the Year - 1997 voice: 850 561-2956 fax: 850 561-2461 ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ====================================================================== ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ======================================================================