Activity-based costing / caterpillar comparison essay assignment

Activity-Based Costing / Caterpillar comparison essay assignment



After reading thoroughly the article entitled ‘Product Costing at Caterpillar’ by Lou F. Jones from Management Accounting, February 1991, your assignment is to:


1.  Compare and contrast product costing at Caterpillar with the activity-based costing systems (ABC) examined in the relevant chapter.  This paper should be between 3–5 pages, double spaced.

2.  Be sure to analyze the article in light of the major sections of the chapter on ABC costing which are:

·         Design of the costing system at CAT versus a traditional ABC system.

·         Comparison of ABC product costs with Caterpillar’s costing system.

·         Process improvement efforts under the Caterpillar system.  Compare those efforts with process improvement efforts under ABC costing.

·         Compare external reports issued under CAT’s system as compared with traditional ABC costing external reports. 

3.  Use any definitions, formulas or excerpts from either the textbook or the Caterpillar paper that can be used as evidence to back up your paper.  If direct quotes are used, be sure to reference them with footnotes.


4.  The Caterpillar/ABC costing paper will be due at the time of the final exam, week 12.  If finished before then, it can be handed in earlier.