Activity-Based Costing in Public Services

The ABC as Tool for Decision Making in Public Administrations

“…two main used methods are the Accounting for cost centres and the Activity Based Costing (ABC).It is wise to point out that the scope that could be pursued through the adoption of the Accounting for cost centres method consists in the acknowledge of the several sustained costs, in order to produce the desired output and, moreover, in the respective imputation of the indirect costs assessed through the causality relationship.The main advantage related to such method consists in the possibility to refer homogenous cost classes directly to the corresponding cost centres and the subsequent overturning of the entire amount on the several products, through a unique sharing criterion(Tuccillo, 2016) [10].The cost centre is usually directly related to a functional organizational unit, to which the corresponding accountability centre is strictly connected. The whole of the functional units making part of the enterprise organization mirrors the requirements underlying the strategy and the management by objective approach adopted by the management(Evans-Bellamy, 1995) [11].…”