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Evaluation Of Cost Center Operations Using Abc Method


  • Madalina Aurelia GRIGORE

    () (University “Valahia” Targoviste)

  • Elena Daniela NICOLAE

    (University “Valahia” Targoviste)

  • George Ciprian GIJU

    (University “Valahia” Targoviste)

  • Daniela MITRAN

    () (“Athenaeum” University Bucharest)


The continuous changes appearing in the industrial and economic environment, upgrading of manufacturing technologies, the need to obtain relevant information to facilitate management decision making, have made absolutely necessary the rethinking of the cost calculation system. Both traditional and modern methods used in management accounting for costing is based on cropping the enterprise into responsibility centers. But within the organization is being felt the interdependence that is impossible to identify a center whose costs and performances are not conditioned by other centers of responsibility. A.B.C. method is one of the means to produce a more relevant cost proposing to allocate indirect costs based on the distribution base showing the cause and effect relationship between activity and product-consuming activity. This article aims to show what cost centers are, which is their role within the responsibility centers, which are the positive effects and the limits of cost centers, which represents and what is the ABC method - a modern method of evaluating a cost center operations and which are the advantages and limitations of this method.

Suggested Citation

  • Madalina Aurelia GRIGORE & Elena Daniela NICOLAE & George Ciprian GIJU & Daniela MITRAN, 2010. "Evaluation Of Cost Center Operations Using Abc Method," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 3(19), pages 56-64, September.
  • Handle: RePEc:ath:journl:tome:19:y:2010(iii):i:19:p:56-64

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    responsibility centers; cost centers; ABC method; activity; cost inducer;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting


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