What question did this study set out to answer?

This research examines the economic impact of activity-based costing systems versus single cost driver systems under different market conditions.

June 15, 2026Journal of Management Accounting Research

Economic Implications of Single Cost Driver Systems.

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Authors

RBRajiv D. BankerTemple University GPGordon Potter

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Implication

Analytical models demonstrate activity-based costing benefits in monopolistic and oligopolistic firms, suggesting conditions for single cost driver use.

Key Points

This research examines the economic impact of activity-based costing systems versus single cost driver systems under different market conditions.
Analytical models are used to evaluate user behavior with product costing systems.
The performance of monopolists and oligopoly firms is analyzed under varying cost and demand parameters.
Monopolists benefit from using multiple cost drivers in activity-based costing systems despite potential measurement errors.
Oligopoly firms also fare better with multiple cost drivers when conditions are stable.
Single cost driver systems may be optimal when demand for a labor-intensive product grows significantly compared to a setup-intensive product.

Cite This Study

Banker et al. (1993) studied this question.

synapsesocial.com/papers/6a2f97c8a1cfeec490828dc1 https://doi.org/10.2308/jmar-9701211534

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Implication

Analytical models demonstrate activity-based costing benefits in monopolistic and oligopolistic firms, suggesting conditions for single cost driver use.

Economic Implications of Single Cost Driver Systems.

Discussion

Member takes

Implication

Key Points

Cite This Study

Economic Implications of Single Cost Driver Systems.

Discussion

Member takes

Implication

Key Points

Cite This Study

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