Glossary

Grenzplankostenrechnung Costing

A cost system that has been in use successfully in Europe for the past 50 years. The English translation of Grenzplankostenrechnung Costing would be "Flexible Analytic Cost Planning and Accounting." Standard Cost includes DM and DL and adds allocated overhead, which consists of plant facilities, depreciation of equipment, and indirect staff. Standard Cost does this to fully absorb all costs into products. But do we need to do that? Grenzplankostenrechnung Costing does not desire to recover all costs, and is more of a "marginal" cost system. Grenzplankostenrechnung Costing is similar to Attribute Based Cost System but focuses on resources (as in RCA.) Grenzplankostenrechnung Costing is a "cost-pull" system as opposed to ABC, which is a "cost-push" system. In Grenzplankostenrechnung Costing costs begin with outputs based on customer demand. In Attribute Based Cost System, a "cost-push" system, costs are passed from one department to another without regard for resources utilized.