Activity-Based Costing Overview Term Paper by Nicky

Activity-Based Costing Overview
An overview of the theory and practice of activity-based costing.
# 147570 | 1,524 words | 11 sources | APA | 2011 | US
Published on May 15, 2011 in Accounting (Managerial) , Business (Management)


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Description:

This paper explains that activity-based costing (ABC) is a method of allocating costs to products and services and how it is generally used as a tool for planning and control. It was developed as an approach to address problems associated with traditional cost management systems that tend to have the inability to accurately determine actual production and service costs, or provide useful information for operating decisions. The paper examines its history and implementation as well as advantages and disadvantages.

Outline:
Description
History of Activity-Based Costing
Advantages to Activity-Based Costing
Disadvantages
Alternative to Activity-Based Costing
Traditional Costing vs. Activity-Based Costing
Applicability in the Work Environment
Implementation
Examples of Activity-Based Costing
Why use Activity-Based Costing

From the Paper:

"One of the basic issues surrounding ABC is the difficulty of implementation. Identifying activities or processes to be allocated properly is cumbersome and takes a lot of effort. It requires that processes are adequately mapped throughout the organization. For a company that has undertaken a quality effort, or an effort to re-engineer business processes, a major part of the work may already be completed.
Just as anything else, ABC is no panacea, nor should it be embraced as a religion, or a fad. It is an operational strategy that needs to be carefully reviewed for applicability. The best way to approach the situation is to first rationalize a facility and its processes, identify the opportunities, and then conceptualize a solution. If this fits, use it (Activity-based costing, n.d.)."

Sample of Sources Used:

  • Activity based costing (ABC). (n.d.). Retrieved Apr 2, 2009, from Managers-Net: http://www.managers-net.com/activityBC.html
  • Activity based costing (ABC): What is it and how can reengineering teams use it? (n.d.). Retrieved Apr 2, 2009, from BPR online Learning Center: http://www.prosci.com/abc1.htm
  • Activity based costing. (1997, Mar 28). Retrieved Apr 2, 2009, from DOE Directives, Regulations and Standards: http://www.directives.doe.gov/pdfs/doe/doetext/neword/430/g4301-1chp24.pdf
  • Activity based costing in the information age. (2003 , Jan). Retrieved Apr 2, 2009, from BNET Business Network: http://jobfunctions.bnet.com/abstract.aspx?docid=90556&tag=content;col1
  • Activity-based costing. (n.d.). Retrieved Apr 2, 2009, from Rockford Consulting Group: http://rockfordconsulting.com/activity-based-costing%20(ABC).htm

Cite this Term Paper:

APA Format

Activity-Based Costing Overview (2011, May 15) Retrieved May 28, 2022, from https://www.academon.com/term-paper/activity-based-costing-overview-147570/

MLA Format

"Activity-Based Costing Overview" 15 May 2011. Web. 28 May. 2022. <https://www.academon.com/term-paper/activity-based-costing-overview-147570/>

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