Activity-based costing - Wikipedia

Cost Management: The management and control of activities and drivers to calculate accurate product and service costs, improve business processes, eliminate waste, influence cost drivers, and plan operations. The resulting information can be very useful in setting and evaluating an organization's strategies.

Activity-based costing | The Economist

Activity-based budgeting (ABB) is based on the outputs of activity-based planning.

Activity Based Costing Flashcards | Quizlet

Activity: Work performed by people, equipment, technologies, or facilities. Activities are usually described by the action-verb-adjective-noun grammar convention. Activities may occur in a linked sequence and activity-to-activity assignments may exist. (1) In activity-based cost accounting, a task or activity, performed by or at a resource, required in producing the organization's output of goods and services. A resource may be a person, machine, or facility. Activities are grouped into pools by type of activity and allocated to products. (2) In project management, an element of work on a project. It usually has an anticipated duration, anticipated cost, and expected resource requirements. Sometimes major activity is used for larger bodies of work.

Activity-Based Costing - ABC - Investopedia

“A method of measuring the cost and performance of activities and cost objects. Assigns cost to activities based on their use of resources and assigns cost to cost objects based on their use of activities. ABC recognizes the causal relationship of cost drivers to activities.”


Community Foundation Activity-Based Costing Analysis

The primary task of activity based costing is to break out indirect activities into meaningful pools which can then be assigned to processes in a manner which better reflects the way costs are actually incurred. The system must recognize that resources are consumed by processes or products in different proportions for each activity.

Activity Based Costing in the Information Age : The ACA …

Activity-Based Costing System: A set of activity-based cost accounting models that collectively defines data on an organization's resources, activities, drivers, objects, and measures.

Activity Based Costing in the Information Age

With ABC, all costs reside in resources, which are such things as material, labor, space, equipment and services. Resources are consumed by activities which have no inherent cost. The cost associated with activities represents the amount of resource they consume per unit of activity. Resources and activities are then applied to cost objects, that is, the purpose for which the resource is consumed and the activity is performed.

Activity Based Costing with Four Activities

Activity Based Costing (ABC) does not change the way material and direct labor are attributed to manufactured products with the exception that direct labor loses its special place as a surrogate application method for overhead resources. Direct labor is considered another cost pool to be assigned to processes and products in a meaningful manner, no different than any other resource.

What Are the Differences Between Activity-Based Costing …

The typical manufacturing company is still arbitrarily attaching overhead to products using Direct Labor as the driver. They are often allocating the largest cost (overhead) based on the smallest (direct labor). Because of product variety and product line complexity, one homogeneous overhead rate is no longer an appropriate average. Finally, today, we have high tech, high speed data collection and reporting tools. With the proper system, gathering and manipulation of data in multiple complex ways is no longer an issue.

Activity-Based vs. Traditional Costing | QuickBooks

Activity-Based Costing Model: In activity-based cost accounting, a model, by time period, of resource costs created because of activities related to products or services or other items causing the activity to be carried out.