activity-based costing

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Activity Based Budgeting

A way to budget that analyzes potential activities in which a company can engage. These activities are organized according to the company's goals, and the costs of each are organized to compile the budget. ABB contrasts with traditional budgeting, which usually simply increases the previous year's budget to account for inflation and the like; rather, ABB seeks out new opportunities and allocates resources in the budget based on them. Proponents say that ABB is a more accurate way to forecast budgeting.

activity-based costing

a system of product costing which seeks to break down the divide between FIXED COSTS and VARIABLE COSTS by looking at the total cost to the business of making a product. All costs are related to cost drivers - the factors which influence the cost of a product.

Activity costing is suggested as an alternative to STANDARD COSTING, which analyses labour costs in detail and tends to share out overheads between products by reference to the direct labour hours involved in making different products. However, in automated factories, where labour is a relatively unimportant part of the total product cost, such detailed analysis of labour may not be justified and direct labour costs may be an inappropriate basis for analysing overheads. For such automated plants activity costing may be preferable, focusing as it does on the forces driving the costs of being in business.

References in periodicals archive ?
Time-driven Activity Based costing for the Improvement of IT Service Operations".
In order to arrive at the exact causes for these non-uniformity, a activity based costing model is developed.
King County is seeking a consultant that can provide advanced and expert level assessment and guidance on King County%s Activity Based Costing - "Model One" development and pilot deployment.
but the method of activity based costing beginning the major activities identification overhead costs proportion to the resources that in each activity consumed after allocation of overhead construction activities, cost drivers (allocation bases) associated with each activity been identified and cost of each activity dispensation covered by the stimulus spending in each of the products, be allocated to these products.
The prerequisites of using Activity Based Costing to calculate cost of production and processes in enterprise has been indicated.
Kaplan (Harvard Business School) is co-creator of Activity Based Costing and the Balanced Scorecard, and Anderson is founder of Acorn Systems, a software and consulting firm.
Its Activity Based Costing functionality provides accurate cost, gross margin and net margin data for each product, broken down by plant and line.
With this in mind, NAVICP-OF will deliver performance measures to the customer with "drilldown" capability, use activity based costing to measure and identify opportunities to improve the FMS process, and will support the NAVIPO initiative to use available information to track the timeliness and value of case execution.
This article reviews stand-alone software packages that provide activity based costing functionality.
Activity based costing, the piece of the enterprise performance management pie on which Sapling built its 17-year-old business, is a hot market which is increasingly being viewed as a core component of an enterprise software suite.
Before leaving it may prove useful to page down to the highlighted (hypertext link) Activity Based Costing Project, this moves simply to another part of the document and, while maybe of some use in education, is not primarily of use here.

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