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Activity Based Costing: A Tool For Decision

T. B. Chinnappa, Dr. N. Karunakaran

CrossRef DOI : 10.31426/ijamsr.2021.4.12.4951

CrossRef DOI URL : https://doi.org/10.31426/ijamsr.2021.4.12.4951

Download PDF Google Search Abstract

A powerful tool for measuring performance, Activity-Based Costing (ABC) is used to identify, describe, assign costs to, and report on agency operations. A more accurate cost management system than traditional cost accounting; ABC identifies opportunities to improve business process effectiveness and efficiency by determining the "true" cost of a product or service. Activity Based Costing is a method for developing cost estimates in which the project is subdivided into discrete, quantifiable activities or a work unit. ABC systems calculate the costs of individual activities and assign costs to cost objects such as products and services on the basis of the activities undertaken to produce each product or services. It accurately identifies sources of profit and loss.

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