Idea behind activity-based costing, Cost Accounting

Idea behind Activity-Based Costing

The most important ideas behind activity-based costing are as given as:

  1. Activities cause costs; activities involve ordering, machining, materials handling, assembly, production dispatching and scheduling,
  2. Products make demand for the activities
  3. Costs are assigned to products upon the origin of a product's consumption of the activities.

Therefore absorption rates under ABC should be more closely linked to such cause of overhead costs and hence product costs should therefore be more realistic especially where support overheads are high.

Posted Date: 2/5/2013 7:43:20 AM | Location : United States







Related Discussions:- Idea behind activity-based costing, Assignment Help, Ask Question on Idea behind activity-based costing, Get Answer, Expert's Help, Idea behind activity-based costing Discussions

Write discussion on Idea behind activity-based costing
Your posts are moderated
Related Questions
The following data relate to three joint products:                                                                               A                 B                     C


ADVANTAGES OF STANDARD COSTING 1.     It offers a yardstick for measurement of performance. 2.     It helps 'Management by Exception'. 3.     It allows the management to

Long-Term Liabilities: These are usually for more than one year. They cover almost all the outsider's liabilities not comprised in the current liabilities and provisions. Such

A  firm of printers  is contemplating  joining  the uniform  costing  system operated by  its Trade Association but the Managing Director is dubious about the benefits of becoming

what is Taylor''s differential piece rate plan

what is a cost sheet? what are its advantages?

G. Mills was appointed a local agent for the High Power Mobile Workshop Bolt (HPMW-B) on 1 April 2009. The HPMW-B is manufactured by Mobile Equipment Ltd (MEL). The company charges

PROFIT VARIANCES Sales variances are important as they have a direct bearing on profits earned by the organization.   thus, they can be used as the basis of determining profit

formula for economic order quantity