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Activity Based Costing(ABC) Is a more recent approach to product costing ,pioneered by Professor Kaplan and Cooper . ABC is an attempt to reflect more accuratly in product costs those activities wich influence the level of support overheads includes such items as Inspection, Dispatch, Production Planing , Set up, tooling and similar costs. ABC system uses many drivers as absorption bases. Because of this , it claims that the use of ABC and several cost driver rates produces more realistic product or service cost
specialy when the support costs are high.
Wiki User
∙ 15y ago
Wiki User
∙ 9y agoActivity based costing is the method in which overhead cost is allocated based on activities performed by departments and not by using any predetermined rate.
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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 abc-analysis stands for?
Activity Based Costing as per Inventory Management.
How would you define activity-based management?
Activity-based management (ABM) is an approach to management in which process managers are given the responsibility and authority to continuously improve the planning and control of operations by focusing on key operational activities.
Cost allocation bases in activity-based costing should be a. cost drivers b. value-added activities c. activity centers d. processes?
C
What is the difference between Activity costing and activity based management?
I think product based management is when you break down a project into all the different products you need. For example, in the case of a UK drug dealing operation the manager will need to make sure he has all of the products he needs to complete the project. This will not include just high quality drugs but also scales, baggies and contacts. In function based management the supplier would tell teams of dealers what drugs need to be where. Instead of a breakdown of every product they need, there is an outcome that must be achieved by teams, with a deadline.
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.
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.
Does Toyota use Activity based costing?
yes
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.
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.
How is activity based costing better than traditional cost assignment systems?
Activity-based costing tries to take the nonuniformity of resource consumption across products into account in the assignment of costs.
How can activity-based costing be used in non-manufacturing industries?
Yes, you can.
