Cost structure changes, due to new production technologies, to major diversification needed because of business competitivity, and to cost reduction, have motivated the development programmes of new cost management techniques that allocate indirect costs to each product more precisely. In this context, Activity-Based Costing/Activity- Based Management (ABC/ABM) is considered as one of the most important techniques that have emerged in the last few years to provide accurate estimates for indirect expenses that each product consumes. Nevertheless, some difficulties to obtain some costs remain, even when using ABC. This happens not only due to the impossibility to measure costs with adequate accuracy, but also due to the fact that the investments made to measure some costs exceed the benefits to be obtained. In order to address this problem, the present work provides a business cost flow framework utilizing data reconciliation used in chemical process networks to determine indirect costs, incorporating accurate information concerning some of the costs. The model developed utilizes non-linear programming.
ABC/ABM; cost management; financial management; data reconciliation