Circuit diagram for activity-based costing (ABC)

Abstract

Cost calculation models are being improved continuously. The advanced methods of cost calculation use such techniques like activity-based costing or full cost allocation. These methods are based on the modelling of operation processes. This paper aims to introduce a new methodology of circuit diagrams by using the operational models as starting points. The operational models are improved through circuit models based on the morphotronic theory. In the circuit diagram profit objects are sources of activity fluxes that are consumed or dissipated inside the cost objects. The intensity of the fluxes is determined by the structure of the network. It consists of the profit objects and the cost objects that are connected with each other, furthermore, of the cost driver units (price or effort) that profit objects must pay and of the intensity of the bonds (resistances) or connections between economic objects (profit and cost objects). The circuit diagram computation of the flow computes in a way that the total cost of the system assumes the minimum value. The circuit diagram defines the independent fluxes and also how to compute the dependent fluxes by the superposition of the independent fluxes. The circuit diagram is included in a more general theory denoted morphotronic. © 2013 Springer-Verlag Berlin Heidelberg.