Презентация на тему Activity-based costing (abc)

costs begin with tracing of activities and then to

producing the product.

the organization.
Relate the overhead cost to the activities.
Support

activities are then spread across the primary activities.
Determine the activity cost drivers.
Calculate the activity cost drivers rate, the quantity of cost driver used by each product.

Traditional Costing

to producing the products
It mainly focuses on activities

performed to produce products
Cost Drivers used for identifying the factors that influence the cost of particular activity
Overhead costs are assigned to Cost Centre or Cost Pools
Overhead costs are assigned to products using Cost Drivers Rates

products
In ABC many activity based on Cost Pools or

Cost Centre's are created
There is no need to allocate and re- distribution of overhead of service departments to production departments
It assumes that fixed overhead costs vary in proportion to changes in the volume of output.

then to producing the products
It emphasizes mainly on ascertainment

of costs after they have been incurred
Cost unit is used for allocation and accumulation of costs
Overhead costs are assigned to production departments or service departments
Overheads allocated on the basis of departmental overhead allocation rate

either on actual cost incurred or on standard cost

basis
Overheads are pooled and collected department wise
The process of allocation and re-distribution of the costs of the service departments to production department is essential to find out total cost of production
It assumes that fixed overheads do not vary with changes in the volume of output.

of the costing data in determination of the cost

of the products.
It facilitates cause and effect relationship to exercise effective cost control.
It provides necessary cost information to the management to take decisions on any matter, relating to the business
It is much helpful in fixing the cost and selling price of a product.

directly to the specific product.
It enables to manage the

activities rather than costs.
It helps to remove all types of wastages and inefficiencies.
It provides valuable information to evaluate on the relative efficiencies of various plants and machinery.
Cost Driver Rates will help in significant impact on the development of new products or modification of existing products.