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Activity-Based Costing and Activity Based Management

What is the purpose of activity-based costing (ABC)? What companies would benefit from an ABC? How does ABC interact with activity based management (ABM)? How can ABC and ABM benefit a service company?

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Activity-Based Costing and Activity Based Management
What is the purpose of activity-based costing (ABC)? What companies would benefit from an ABC? How does ABC interact with activity based management (ABM)? How can ABC and ABM benefit a service company?

Activity based costing allocates the cost to the cost driver on the basis of activity rate. ABC method and to compute a cost driver rate. It involves following steps:
1) Assign costs to pools according to activities that cause costs to be incurred.
2) Allocate costs in the activity pools to products.
Where the Formulae for Cost driver rate=
= (Total overhead costs of activity)/ Activity volume
3. Assign Activity Costs to Products

Purpose of ABC
ABC assigns costs to products by ...

Solution Summary

Response discusses the Activity-Based Costing and Activity Based Management

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