Activity based costing is a method of cost attribution to cost units on the basis of benefits received from indirect activities. Their performance of particular activities and demands made by these activities on the quantity of resources of organisation are linked together so that the cost of product is arrived at as per the quantum of actual activities performed to [...]
In this article we will discuss about Activity-Based Costing (ABC):- 1. Meaning of Activity-Based Costing (ABC) 2. Steps in Activity-Based Costing 3. Advantages 4. Problems 5. Factors 6. Installation. Contents: Meaning of Activity-Based Costing (ABC) Steps in Activity-Based Costing Advantages of Activity-Based Costing Problems with the ABC Approach Factors Influencing Application of ABC Installation of ABC System 1. Meaning of [...]
The upcoming discussion will update you about the difference between Traditional Costing System and Activity-based Costing System (ABC). Difference # Traditional Costing System: 1. Single or limited number of cost pools or cost centres exist. 2. Overhead costs are first related to the various production and service departments and then to products. 3. Overhead costs are charged to products on [...]