Skip to main content Skip to Search Box
Definition: activity-based costing from Dictionary of Accounting

A costing system used to assign overhead costs to specific items produced, by looking at specific cost drivers. Abbreviation ABC. See cost driver, activity driver, resource driver

activity based costing

From QFinance: The Ultimate Resource
calculating business’s cost from cost of activities a method of calculating the cost of a business by focusing on the actual cost of activities, thereby producing an estimate of the cost of individual products or services. An ABC cost-accounting system requires three preliminary steps: converting to an accrual method of accounting; defining cost centers and cost allocation; and determining process and procedure costs. Businesses have traditionally relied on the cash basis of accounting, which recognizes income when received and expenses when paid. ABC’s foundation is the accrual-basis income statement. The numbers this statement presents are assigned to the various procedures performed during a given period. Cost centers are a company’s identifiable products and services, but also include specific and detailed tasks within these broader activities. Defining cost centers will of course vary by business and method of operation. What is critical to ABC is the inclusion of all activities…
6,468 results

Full text Article activity-based costing

From Collins Dictionary of Business
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…
| 146 words
Key concepts:
Activity-based costing (ABC) is a means of analyzing costs according to particular activities performed by individuals, teams, divisions, or other components of a company. These activities can be analyzed on many levels, for example, looking at a process to determine the cost of the overall process, …
| 753 words
Key concepts:

Full text Article Activity-Based Costing

From QFinance: The Ultimate Resource
Activity-based costing (ABC) attempts to create the big picture— crystal-clear, full, and accurate—by painting assorted little pictures. ABC identifies the relationship between a business activity and all the resources needed to conduct it by assigning costs to each of those resources, thus…
| 1,880 words
Key concepts:

Full text Article Calculating Activity Based Costing

From BUSINESS: The Ultimate Resource
Activity based costing (ABC) attempts to create the big picture—crystal-clear, full, and accurate—by painting assorted little pictures. ABC identifies the relationship between a business activity and all the resources needed to conduct it by assigning costs to each of those resources, thus…
| 1,587 words
Key concepts:
Overhead Assignments and Activity...
What is activity-based costing (ABC)? Activity-based costing (ABC) is a method of assigning costs to cost objects in companies that produce many different products or provide services using multiple allocation bases. How is ABC different from job-order costing? ABC is quite similar to job-order…
| 1,427 words , 6 images
Key concepts:

Full text Article Activity Based Costing (ABC)

From Dictionary of Industrial Terms
A costing procedure devised by Robert Kaplan (*) and Robin Cooper in 1988 whereby the costs incurred in manufacturing are not accumulated by geographic area, and then assigned to products based on a simple “cost driver,” such as the number of employees in the area, but instead are accumulated by…
| 162 words
Key concepts:

Full text Article activity based costing

From QFinance: The Ultimate Resource
calculating business’s cost from cost of activities a method of calculating the cost of a business by focusing on the actual cost of activities, thereby producing an estimate of the cost of individual products or services. An ABC cost-accounting system requires three preliminary steps: converting to…
| 299 words
Key concepts:

Full text Article activity based costing

From BUSINESS: The Ultimate Resource
a method of calculating the cost of a business by focusing on the actual cost of activities, thereby producing an estimate of the cost of individual products or services. An ABC cost-accounting system requires three preliminary steps: converting to an accrual method of accounting; defining cost…
| 297 words
Key concepts:

Full text Article Activity-based costing (ABC)

From The AMA Dictionary of Business and Management
Method of costing products that links overall cost to the total cost of all activities that contribute to their manufacture. It is designed to control Indirect costs and to reflect actual rather than paper costs. The method assigns costs to products based on resources actually consumed and efforts…
| 742 words
Key concepts:
Total costs over time
EXECUTIVE SUMMARY Traditional cost allocation methodologies in firms can provide misleading information about the profitability of products, product lines, customers, and markets. Activity-based costing (ABC) provides more meaningful information about the drivers of costs, the activities performed…
| 2,596 words , 1 image
Key concepts:
Mind Map

Stack overflow
More Library Resources