9th Annual Conference of the International Group for Lean Construction - Singapore, Singapore - 2001

Activity-Based Costing and Its Applicationto Lean Construction

Yong-Woo Kim1 & Glenn Ballard2

1Ph.D. Candidate, Constr. Engrg. And Mgmt. Program, Civil and Envir. Engrg. Dept., 215 McLaughlin Hall #1712, University of California at Berke ley, CA 94720, [email protected]
2Director of Research, Lean Construction Institute, and Associate Adjunct Professor, Construction Engineering and Management Program, Civil and Envir. Engrg. Dept., University of California at Berkeley, 4536 Fieldbrook Road, Oakland, CA 94619, [email protected]

Abstract

Activity-Based Costing (ABC) has been popular since the 1980s because it prevents cost distortions and provides a process view which traditional cost accounting cannot provide. Activity-Based Costing is based on a “flow view” in production theory in that ABC adopts two-staged costing, i.e., resources are assigned to activities and activities are assigned to cost objects. Lean construction comes from recognizing the limitations of current project management and applying “lean production” to the construction industry. This paper presents an application of ABC and an example of applying ABC to construction, exploring the relationship between activity-based costing and lean construction. It shows that lean project control can encompass cost control by adopting an activity-based costing system.

Keywords

Activity-based costing, resource-based costing, transformation view, flow view, and lean construction

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Reference

Kim, Y. & Ballard, G. 2001. Activity-Based Costing and Its Applicationto Lean Construction, 9th Annual Conference of the International Group for Lean Construction , -. doi.org/

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