Rationalizing the Distribution of Costs According to Resource Consumption Accounting

Abstract

Resource consumption accounting is considered a well-received concept since it provides a solution to wide range of operational problems facing industries. This type of accounting was formed by the integration of two organizational systems, which are the German Cost Accounting system and the Activity-based Costing system. Resource consumption accounting was used to play a major role in the process of cost rationalization, the resource allocation process and resource management in line with modern environmental and economic developments. The aim of this emerging system is to achieve greater accuracy in planning of costs, better management of idle energy, and the availability of financial and non-financial information to support administrative decisions and reduce costs. The study assisted in drawing a set of conclusions, the most important of which is that the units of economy have indicated the clear lack of the application of the resource consumption accounting system. Bearing in mind that its application could assist in increasing profits in organizations. Additionally, the absence of an actual and proper application of a costing system or one of the cost management tools highlighted by the resource consumption accounting system, which contributes to how to manage idle energy and work on its employment. Therefore, the study is recommending the adequate attention to be paid to the application of the resource consumption accounting system