Cost management
This query is : Resolved
Supriyo Dutta
(Querist)
27 July 2011
advantages of activity based costing?
27 July 2011
Activity based costing (ABC) is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore "fixed cost".
Activity based costing system has the following main advantages / benefits:
1)More accurate costing of products/services, customers, SKUs, distribution channels.
2)Better understanding overhead.
3)Easier to understand for everyone.
4)Utilizes unit cost rather than just total cost.
5)Integrates well with Six Sigma and other continuous improvement programs.
6)Makes visible waste and non-value added activities.
7)Supports performance management and scorecards
8)Enables costing of processes, supply chains, and value streams
9)Activity Based Costing mirrors way work is done
10)Facilitates benchmarking
Activity based costing system has the following main advantages / benefits:
1)More accurate costing of products/services, customers, SKUs, distribution channels.
2)Better understanding overhead.
3)Easier to understand for everyone.
4)Utilizes unit cost rather than just total cost.
5)Integrates well with Six Sigma and other continuous improvement programs.
6)Makes visible waste and non-value added activities.
7)Supports performance management and scorecards
8)Enables costing of processes, supply chains, and value streams
9)Activity Based Costing mirrors way work is done
10)Facilitates benchmarking
27 July 2011
Also see below link for more and more info---
https://www.caclubindia.com/forum/details.asp?mod_id=112246
https://www.caclubindia.com/forum/details.asp?mod_id=112246
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