Resource Consumption Accounting(RCA) is a management accounting concept, evolved as an integration of German Cost Accounting(GPK) method with the American Activity-Based Costing(ABC) approach. RCA has a ripple effect throughout the entire management process of an enterprise. RCA is typically applied as part of an Enterprise Resource Planning (ERP) system effort to achieve the best combination of cost management principles implemented in an integrated fashion.

Practices in cost management describes the approaches and activities of managers in short-run and long-run planning and controlling decisions that increase value for customers and lower costs of production. These practices change in tandem with the transformation of business organizations triggered by global competition and aggressive technological innovations, to adapt to the dynamic and complicated business environment. The most notable change in the recent past is the amalgamation of the best in strategic cost methods from various countries which can provide more relevant cost and performance information on the enterprise's activities, processes, products, services and customers and subsequently can capture the complexities and interrelationships involved in those aspects. Resource Consumption Accounting (RCA) is a comprehensive, fully integrated cost management system that leverages the best of the last several decades of development in the discipline of cost management in Europe in the form of German Cost Accounting (GPK) and in the US in the form of Activity Based Costing (ABC). This merger of the best of two worlds provides an integrated and comprehensive approach to management accounting (Merwe & Keys, 2002). RCA is a method of accounting that analyzes and tracks resources instead of activities. It is also used to measure and manage capacity, map specific resources to specific processes and activities and define "pools", or "families", of resources. With this backdrop, an attempt has been made to analyze the efficiency of RCA as a technique for effective cost planning and control in a manufacturing organization. The article also provides a conceptual framework for application of RCA as a comprehensive approach to management accounting.

Resource Consumption Accounting : A Conceptual Framework, management accounting concept, integration of German Cost Accounting, American Activity-Based Costing, ripple effect, entire management process, enterprise, Enterprise Resource Planning, system effort, achieve the best combination, cost management, principles implemented, integrated fashion, manufacturing organization, effective cost planning