Professional Documents
Culture Documents
Activity-Based
Costing and
Activity-Based
Management
GROUPS 8: SCHOLARSHIP
Table of contents
05 Implementing
Activity-Based Costing
02 Refining a Costing
System
Considerations in
03 Activity-Based Costing
Systems
06 Implementing
Activity-Based Costing
Systems
1 2 3 4 5 6 7
EXHIBIT 5-1
Overview of Plastim’s
Simple Costing System
Simple Costing System Using Single
Indirect-Cost Pool
EXHIBIT 5-2
Plastim’s Product Costs Using the Simple Costing System
Simple Costing System Using Single
Indirect-Cost Pool
5 Compute Rate per Unit of Each Cost-Allocation Base
=> Requires minimal data => Implementing ABC may involve significant time
collection and analysis. and resources.
4. Accuracy:
- especially in environments => It helps identifying the true cost drivers and the factors
where products or services have influencing the costs of products or services
diverse cost drivers
5. Cost Control and Decision Making:
Simple Costing System:
ABC assigns a cost to every activity during the production process, such as
employees testing the product or prototyping.
The cost pool in the formula represents the group of individual costs that an
organization associates with an activity.
The activity-base costing steps:
Step 1. Identify activities
In ABC, an activity is process that consumes overhead
resources when creating a product.
=> This stage aims to identify all activities an organization
requires when making its products.
Design decisions