Professional Documents
Culture Documents
Resource Consumption Accounting
Resource Consumption Accounting
ACCOUNTING
SRIHARSHA SANAPALA
SESHAGIRI VENKATACHALAM
(ADVANCED ACCOUNTING &
CONTROLLING ) R.FISCHER
AGENDA
• Conventional Accounting Method
• Example : Conventional Accounting
Method
• Resource Consumption Accounting –
What is it?
• 3 Pillars of RCA
• Case Study – Clopay Case
• Conclusion
CONVENTIONAL COST
ACCOUNTING
• Arbitrarily Apportion Overhead to Cost
objects
P1 P2 P3 S1 S2
Resource Process
• RCA integrates–Activity- View View
based Costing and GPK Advantage Advantages
s
GPK ABC
• RCA creates an integrated
economic model of
RCA
WHAT IS THE SOURCE • CHARACTERISITICS
OF COSTS IN AN OF COSTS:
ORGANIZATION? • Fixed or Proportional
Products • Attributable to a
Overhead resource
Processes or • Original
Activities Characteristics
change as they are
used by an
organization’s
Resources Cause processes.
Costs!!!
3 PILLARS OF RCA
Principle 1: Focus on resources & their consumption
• Understand your resources & their consumption,
understand cost
• Resources are changeable with respect to costs.
Principle 2: Quantity structure for Resource
Consumption
• Assignment of Quantifiable units rather than
dollars
• Model the operation & use of resources, then apply
cost
• Enables resource capacity management
Principle 3: Recognizing the inherent and changing
nature of costs
• Resource pools start with an inherent cost
structure
• As Resources are consumed, the nature of their
CASE STUDY – CLOPAY CASE
• Clopay Plastics – Leading Manufacturer
of Specialty films , Extrusion coatings
and Laminations.
• Headquartered in Cincinnati, Ohio
• Case study conducted in Augusta Plant,
KY.
• KY plant production= 200 products in 60
product families.
5 EXTRUSION PRODUCTION
DEPARTMENTS DEPARTMENTS
1 CONVERTING DEPT – 2 SHEET
CUTTERS, 1 REWINDER & 1
PERFORATOR
SUPPORT
DEPARTMENTS
QUALITY
MATERIALS SHIPPING
MANAGEMENT
MAINTENANC
ADMINISTRATION E
Pre-RCA Issues: