ACTIVITY BASED COSTING (ABC)

Costs are first traced to activities and then to products Focuses on activities performed to produce costs Assumes that activities are responsible for the incurrence of costs and products create the demands for activities In TPCS, costs are traced to organizational unit and then to products Second and the final stage consists of tracing costs to the products

CONTINUED ABC tries to ascertain the factors that cause each major activity, cost of such activities and the relationship between activities and products produced

Resources / Factors

Activities

Products