Friday 18 January 2019

Activity-based costing | Activity based costing Steps, Examples, Formula & pdf

Activity-based costing

Product diversity

Show the total and diversity product families offered. in this respect more and more products that are produced, the more suitable using ABC analysis (activities based costing). It is more and more diverse because of if produced products are increasingly diverse in turn result in activity up to increasingly high level distortion cost.

Support diversity

It shows the total and results in unusually high diversity of activity in production overhead costs. the matter caused difficulty in allocating overhead fees. so, the more total and diversity of activities are more suitable using ABC analysis (activities based costing).

Common industrial

It may Describes high low level activities carried out to produce certain products until their respective period of confidential separated product fees. Joint activities, for example the activities of manufacturing, engineering, marketing, distribution, accounting, material handling, etc. much of the operating needs in the enterprise department will cause many common costs. It impacts on the difficult allocation of costs per product. so, the higher the level of the more common ABC (activities based costing) use of suitable analysis.

The monthly cost allocation

The capabilities of available allocates outlay accounting outlay periods in accurate. the outlay is money outlay period is identified with a certain time interval because it is not necessary to obtain goods or products that will be sold. to be able to reduce the product fees then more recommended the proportion of the most period in the product. enterprises to implement the matter suitable for using ABC analysis (activities based costing)

Rate of growth of your period costs

It shows the speed of growth floor periods fees throughout the year. enterprises that have a growth period of rapid cost estimation will be hard to allocate costs, and the level of possibility to get high fees becomes a distortion. then enterprise which has growth rapidly period fees (activities based costing).

Pricing freedom

The floor of independence of enterprises in determining the price of producing product profitability. enterprises which owns non-compliance in competition with competitors in the market. competitive impacts on the determination of cost for adventurous enterprises. then the enterprise has no floor independence to determine the suitable price and enterprise by using ABC analysis (activities based costing).

Have your expense ratio

Indicates that the occurrence of distortion materially products fees. This is the proportion of the gain. If the enterprise gains has a significant influence over the enterprise, then, using a suitable analysis of ABC (activities based costing)

Strategic considerations

Shows how important information is utilized in the process of decision-making management. Decisions are taken by the management of adopted strategy by enterprises, not just confined to marketing strategies. up to the important important information fees in decision-making then the Enterprise is suitable using analysis of ABC (activities based costing).

Cost reduction effort

The description of how important reporting is the allocation of accuracy for period fees for internal decision-making management. availability reporting period accuracy allocation fees are also related to evaluation for internal management. The information can be used to help help make the more accurate policy later on. so the higher the level of the more suitable accuracy of interest using ABC analysis (activities based costing).

Analysis of frequency

It may shows high low activities related to the analysis of charge on the product. many activities related to frequency needs information fees. the higher the floor the accuracy of the floor frequency allocation then even fees are also increasingly wide. so the higher the storey frequency, enterprises are more suitable using ABC analysis (activities based costing).

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