Snapshot^® Cost Sampling

In today's competitive environment it is increasingly important that an organization have a clear picture of its costs of doing business.  Such information is critical for assessing product profitability and pricing as well as managing improvements in the organization's efficiency or productivity.  Most cost accounting systems do not provide sufficient tools for understanding an organization's real costs.  This is particularly a problem in the case of indirect costs, and for costs in service organizations, where it is often difficult to allocate properly the costs to the products or functions being supported.

Organizations can now obtain the cost information they need by doing a SNAPSHOT^® cost sampling study.  The approach is essentially to take a picture of the work being performed at randomly sampled points in time and then to develop that information into a comprehensive analysis of the organization's costs.  The SNAPSHOT^® study is inexpensive and easy to implement, and it involves minimul disruption to the organization.

The SNAPSHOT^® approach is particularly useful for providing an objective data foundation for implementing Activity Based Costing (ABC) models.  ABC implementations rely all too often on subjective judgments in the development of key model parameters.  The SNAPSHOT^® approach provides a means for obtaining quantitative values for key ABC parameters based on objective data rather than subjective opinion.

The following articles provide further information on the SNAPSHOT^® methodology:

“The SNAPSHOT^® Cost Study Reveals True Costs”, by Michael A. Crane.  (click below to download)

“Building an Objective Data Foundation for Activity Based Costing”, by Michael A. Crane (click below to download)

“Focusing on True Costs in A Service Organization”, by Michael A. Crane and John Meyer, Management Accounting, February 1993.

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