The Process of Activity Based Costing (ABC) simplified




Activity Based Costing
Knowledge Center

Best Practices
18
rahul_6098, India

The Process of Activity Based Costing (ABC) simplified

While doing ABC the only thing to be kept in mind is the activity and the cost associated with it.
For example : A businessman buys a bus for using it in his public transport business. So he will analyse the cost associated with procurement of bus. Then he will have to analyse the cost of getting a driver, everyday fuel consumption, maintainance, contingencies. Now by using ABC, he can eliminate all the unnecessary steps which add to the cost but don't add any (enough) value to the product.
ABC is a helpful tool if you have clarity of ABC and the process under observation.
 
Comments

Rating

 
0
liza cristobal
Professor, Philippines
 

The Process of Activity Based Costing Simplified

Rahul you really simplified the process but that's good, because even my daughter who is still studying will now understand what ABC means and what it is used for.

   

More on Activity Based Costing:
Summary
Discussion Topics
Limitations and Advantages of ABC for Budgeting
Limitations ABC monitoring operations
ABC in an Advertising Firm?
The Cost of Non-value-added Activities
ABC: reduce non value adding activities?
Consequences of ABC Analysis
Capacity Minutes and Industry Norms
Drivers still Right?
ABC Helps Companies Survive Recession
Traditional Costing versus Activity Based Costing
👀The Process of Activity Based Costing (ABC) simplified
Activity Based Costing (ABC)
Conditional Resources in ABC
ABC in service companies such as airlines?
Overhead Costing - Food Manufacturing
Degree of Detail in ABC
Activity Based Costing Implementation
ABC and Decision making
Time-driven ABC (TDABC)
Activity Based Management (ABM)
Calculating the Most Profitable Way of Manufacturing a Product
ABC or TOC? The Differences between Activity Based Costing and the Theory of Constraints
Recommended ABC Software
Comparison Activity Based Costing, Time-Driven-ABC and Lean Accounting
ABC Costing in Make to Order of Repetive Manufacturing
Organizational Issues when Introducing ABC
Over Recovery / Under Recovery Level
🔥What is Process Costing?
ABC in the Federal Environment
An ABC Initiative is Only as Effective as the Software That Supports It
What is Job Order Costing?
How to Derive Overhead Cost from a P&L?
Special Interest Group

Do you know a lot about Activity Based Costing? Become our SIG Leader

Activity Based Costing
Knowledge Center



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2023 12manage - The Executive Fast Track. V16.1 - Last updated: 25-3-2023. All names ™ of their owners.