I was pointed at a summary of Activity Based Costing yesterday and having read it I had a few questions for the author, David Katz. I wrote to David with these questions and he kindly replied. Full details as follows: The article Activity Based Costing (ABC) at CFO.com (Linked with the permission of CFO.com) My questions Thanks for the interesting article on ABC, David. However, I have to take issue with you on your suggestion that Bob Kaplan "invented" ABC. There is no doubt, as you are probably aware, that Kaplan was at the forefront of the development of ABC from an accounting standpoint, although Kaplan is not an accountant himself, of course! In reality ABC was developed by non accountants in a non accounting environment; and production and other non financial managers at Hewlett Packard are given significant credit for their work on wresting cost accounting development from their accounting colleagues. Secondly, I would say that any problems that ABC has faced is due in large measure to the fact that accountants don't like it. The history of cost accounting, and this time Kaplan, with Johnson (Relevance Lost), is at the vanguard of developments, shows us that the average cost accountant is lazy, uncreative and lacks initiative. Kaplan and Johnson found that most cost accounting ideas and techniques in use today have been in place since around 1925 ... no wonder that non accountants developed ABC, then, is it? A cost accounting system that is seen as difficult to design and maintain is not attractive even though its outputs are significantly better than the alternative, traditional system. David's response Thanks for your thoughtful comments. I don't think the piece suggests that Kaplan "invented" ABC; in fact, it doesn't use that word. Also, we did say that a main barrier to ABC implementation was the resistance of accountants. Your point about the development of the idea by production types outside the accounting arena was illuminating, however. Thanks again. David M. Katz Assistant Managing Editor CFO.com davidkatz@cfo.com At least there are people who reply to genuine questions, unlike the people over at my rubbishEnglish Blog who think that by ignoring questions, all is well with their world! DW