Resource Consumption Accounting blends the German cost management system (GPK) with Activity Based Costing (ABC). The merger of these two methods provides a comprehensive approach to management accounting. The German cost management system, Grenzplankostenrechnung (GPK), roughly translates to flexible standard costing in English. It is a.
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Grenzplankostenrechnung is a German costing methodology, developed in the late 1940s and 1950s, designed to provide a consistent and accurate application of how managerial costs are calculated and assigned to a product or service.
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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.
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