THE DESIGN PROCESS OF AN ACTIVITY BASED COST (ABC) SYSTEM AT A CHEST FREEZER ASSEMBLY PLANT: A CASE STUDY

Abstract

Activity based costing is one of the most important innovations in the field of costing and performance evaluation in operating systems. This paper presents a case study of the successful design and implementation of an ABC system at the chest freezer assembly plant of Electrolux Co. in Hungary. The strong international character of the implementation og the project and the interesting results provide information for both practitioners and researchers in this field. This paper presents the company background, the current costing practice, illustrates the theoretical and pragmatic considerations of the design process and finally analyses the difference between the old and new product costs.