The design of an ABC system: In theory and at DSB

Anders Dall Madsen

Studenteropgave: Kandidatafhandlinger


In order to correctly manage a company it is a necessity to be fully aware of how its output consumes its various inputs, which is to say, how the products of the company generates cost. For a large company such as DSB that produces an intangible product with a small proportion of the costs being direct, it is especially important to be able to come up with an acceptable allocation of the various indirect costs that these products generate. In order to allocate these costs, DSB has employed the ABC model, invented by Robin Cooper and Robert S. Kaplan, which is a refined cost allocation system that in its theoretical framework, functions by adopting an activity based view of the various actions of the company DSB has adopted and modified this model in order for it to fit the company’s unique agenda of both explaining DSB’s allocation of public compensation to external auditors, and to provide the company with important information for internal strategic purposes. For example the company has expanded the traditional resource and activity stages to include stages within the stages, thus allowing for greater detail in the allocation. Furthermore the model that DSB has created is a full cost model, also actually allocating both the direct costs and the revenue to the cost objects. While direct costs are not normally allocated, per their nature of being direct, the cost objects of DSB are of such a nature that this is necessary. In its analysis the thesis finds that DSB has taken several steps to correctly design the ABC model, and thus finding a feasible trade-off between the sources of errors that can arise in a too simplified model, and the cost and size of a too complex model, which can also bring errors into the system. The data that DSB gains from the model is then used for ranged of strategically decisions, such as analysis concerning their capacity, to calculate the costs of a potential new route in connection with bids and general data to benchmark DSB against other train operators.

UddannelserCand.merc.asc Accounting, Strategy and Control, (Kandidatuddannelse) Afsluttende afhandling
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