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Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print)
Quarterly Publication
Volume 7 Issue 3 pp. 135-144 , 2017

Activity based costing model for inventory valuation Pages 135-144 Right click to download the paper Download PDF

Authors: Vineet Chouhan, G. Soral, Bibhas Chandra

DOI: 10.5267/j.msl.2016.12.003

Keywords: Activity Based Costing (ABC), Inventory Valuation, Inventory, Inventory control, Traditional Costing, Decision making

Abstract: Activity-Based-Model (ABC) is used for the purpose of significant improvement for overhead accounting systems by providing the best information required for managerial decision. This pa-per discusses implacability of ABC technique on inventory valuation as a management account-ing innovation. In order to prove the applicability of ABC for inventory control a material driven medium-sized and privately owned company from engineering (iron and steel) industry is select-ed and by analysis of its production process and its material dependency and use of indirect in-ventory, an ABC model is explored for better inventory control. The case revealed that the ne-cessity of ABC in the area of inventory control is significant. The company is not only able to increase its quality of decision but also it can significantly analyze its cost of direct material cost, valuation of direct material and use its implications for better decision making.

How to cite this paper
Chouhan, V., Soral, G & Chandra, B. (2017). Activity based costing model for inventory valuation.Management Science Letters , 7(3), 135-144.

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Journal: Management Science Letters | Year: 2017 | Volume: 7 | Issue: 3 | Views: 5996 | Reviews: 0

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