Activity Based Costing Implementation

Activity Based Costing
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Rose

Activity Based Costing Implementation

How can a company implement activity based costing?

  ANDRES PENAGOS
Financial Consultant, Colombia
 

Implementation Method ABC

Rose, first of all you have to analyze the company you are implementing in. Get info and details of products and services, information structure, processes, cost objectives, needs of information, solutions wanted, organizational structure. Then you begin to defining the model, processes, activities, operations, products.
The next step you have to analyze and structure the information sources, which will provide info to ABC model (most critical step in the hole process).
Next step set up the model in some ABC software, set up the software requirements, run process, analyzing results.
It seems easy but it is complex in the beginning.

  Gary Cokins
Business Consultant, United States
 

ABC Implementation Method

The proven way to successfully implement ABC is through the approach of "ABC rapid prototyping" (build high level Model #0 in 3 days with only 5 or so employees) followed by a few iterations (Models #1, 2, etc.).
Within a few weeks you have a permanent, repeatable ABC production reporting system. I describe this method in my ABC books I have authored.

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