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The Process of Activity Based Costing (ABC) simplified

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

SIG Leader

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

Knowledge Center

Activity Based Costing
Knowledge Center



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