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I would like to answer this questions humorously. Pl do not use Activity Based Costing if;
1) You do not want to understand the profitability of the products, customers, channels. the true costs and cost drivers for the profitability.
2) You do not want to set targets based on the profitability.
3) You not want to optimize the profits by optimizing customer segments
4) You do not want to optimize the processes and their costs
5) You not want to use a flexible reporting system that helps to take operating, tactical and strategic business decisions.
More on this on the link below.
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∙ 12y ago
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Does Toyota use Activity based costing?
yes
What is the main difference between activity based costing and attribute based costing?
activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
Activity-based costing is a means of more accurately accounting for direct labor cost?
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
How does activity based costing differ from traditional based costing?
Activity based costing has primary difference of allocation of overheads which are based on activities performed by any department while in traditional costing system overheads are allocated on predetermined rate which may be not very accurate.
Does Activity Based Costing produce an accurate costing picture?
Hi Activity Based Costing could be seen as the 'Cause-and-Effect' realtionship in the costs. If we extend this logic then we can segregate all the costs in four sections. a) Product Costs b) Customer Costs c) Business Sustaining Costs d) Cost available to use In this sense the Activity Basedd Costing gives an accurate costing picture.
Does Toyota use Activity based costing?
yes
Problem relating to the implementation of activity based costing and activity based management system?
Answering "Problem relating to the implementation of activity based costing and activity based management system
What is the main difference between activity based costing and attribute based costing?
activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
Activity-based costing is a means of more accurately accounting for direct labor cost?
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
Company using absorption costing?
It is old costing technique & it is replaced by activity based costing
How does activity based costing differ from traditional based costing?
Activity based costing has primary difference of allocation of overheads which are based on activities performed by any department while in traditional costing system overheads are allocated on predetermined rate which may be not very accurate.
Does Activity Based Costing produce an accurate costing picture?
Hi Activity Based Costing could be seen as the 'Cause-and-Effect' realtionship in the costs. If we extend this logic then we can segregate all the costs in four sections. a) Product Costs b) Customer Costs c) Business Sustaining Costs d) Cost available to use In this sense the Activity Basedd Costing gives an accurate costing picture.
What is the differences between activity-based costing and traditional product costs?
In traditional costing, overheads are allocated using blanket rate while in activity based costing overheads are allocated by the activities performed.
What activities does activity based management encompass?
ABM strategically incorporates activity analysis, activity-based costing (ABC), activity-based budgeting, life cycle and target costing, process value analysis, and value-chain analysis.
How would you describe activity based costing?
Activity-based costing is a form of cost refinement, designed to obtain greater accuracy than traditional allocations in cost assignments for product costing and decision-making purposes.
What has the author Dervla Geraghty written?
Dervla Geraghty has written: 'The practical use of activity based costing in Ireland'
Why activity based costing?
Activity based costing allocate the overhead expenses based on activities performed and that's why it is an accurate way to allocate overhead expenses while in absorption costing, overheads are allocated based on some ratios or predetermined rate which is not accurate method of allocation of cost.
