Philip R. Beaulieu
University of Calgary
Anita Lakra
University of Calgary
Abstract: Textbook authors and publishers face a difficult decision regarding coverage of activity-based costing (ABC). ABC could be presented in strictly positive terms because it enjoyed immense popularity when it was introduced in the 1980s, and it is still presented in favorable terms in practitioner journals. On the other hand, it is possible to criticize ABC on practical and theoretical grounds. In practice, surveys report that ABC adopters are a minority of firms and that there are indications of dissatisfaction among users, and in theory ABC requires direct proportionality and the absence of common costs (Noreen 1991), which are difficult conditions to meet. We describe the practical and theoretical material supporting criticism of ABC that is available to be cited by textbook authors and review coverage in five management and cost accounting textbooks.
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