Is Activity-Based Costing the Right Tool for Your Organization?

Overview

This session provides a refresher regarding the fundamentals of activity-based costing (ABC). We will examine theoretical concepts before exploring practical possibilities for implementing ABC. A major focus of the course will be factors to consider when determining whether this managerial accounting tool is an appropriate resource for an organization.

Objectives

• Revisit the fundamental underpinnings of ABC
• Understand what types of business entities may benefit from ABC
• Appreciate potential benefits of ABC
• Recognize limitations of ABC

Highlights

• ABC versus traditional costing
• First-stage allocation
• Determining predetermined overhead rates
• Second-stage allocation
• Activity-based reporting
• Activity-based management