The Core Elements of RCA
There are three core elements that enable RCA to lay a very different foundation for its cost model.
- The view of resources – resources and their costs are considered foundational to proper cost modeling and decision support. An organization’s cost and revenues are all a function of the resources that produce them.
- Quantity-based modeling – the entire model is constructed using operational quantities. Operational data is the foundation of value creation and the leading indicator of economic outcomes.
- Cost behavior – value is added as a veneer to the quantity-based model and costs/dollars behavior is determined by the behavior of resource quantities as they are applied to value creating operations within an organization.
Read more about this topic: Resource Consumption Accounting
Famous quotes containing the words core and/or elements:
“For books are more than books, they are the life
The very heart and core of ages past,
The reason why men lived and worked and died,
The essence and quintessence of their lives.”
—Amy Lowell (1874–1925)
“Barbarisation may be defined as a cultural process whereby an attained condition of high value is gradually overrun and superseded by elements of lower quality.”
—Johan Huizinga (1872–1945)