Activity-based costing (ABC)

Activity based costing (ABC) – Definition An activity-based costing system (also known as ABC System) is a two-stage procedure for assigning overhead costs to products, which focuses on the major activities performed in the production process. Activity-based costing is a costing method that identifies activities in an organization and assigns the cost of each activity …

Read more

Computation of unit cost under activity-based costing

Activity-Based Costing Activity Based Costing uses cost drivers to assign the costs of resources to activities and unit cost as a way of measuring output. Steps to implement Activity-based Costing (ABC) The four steps to activity-based costing ABC implementation 1. Identify activities of activity-based costing Perform an in-depth analysis of the operating processes of each …

Read more