sting model is a good, though not perfect, model for allocating revenues to expenses—ABC accounting is just a more detailed approach to standard costing. Throughput and lean accounting show some promise but waiting till GAAP are amended could be a long wait. The point is to stop fighting over the standard costing model. Companies should use accurate operations science models to get best possible throughput and response time with minimal investment in capital (machines, people and inventory). Once that is accomplished, Accounting can happily allocate revenues to expenses however best suits financial reporting requirements. In the end, Accounting and Operations should pull together for best possible performance. – ESP
1The Papers of Alexander Hamilton, vol. 14, p. 314, “Report on the State of the Treasury at the Commencement of Each Quarter During the Years 1791 and 1792,” February 19, 1793.