What Are the Benefits of Activity Based Costing?

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Offline fahmidaemran

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What Are the Benefits of Activity Based Costing?
« on: November 11, 2018, 12:40:23 PM »
What Are the Benefits of Activity Based Costing?
Cost accountants know that traditional cost accounting can hide or distort information on the costs of individual products and services—especially where local cost allocation rules misrepresent actual resource usage. As a result, the move to ABC usually motivated by a desire to understand the "true costs" of individual products and services more accurately. Companies implement activity-based costing to:

    Identify specific products that are unprofitable.
    Improve production process efficiency.
    Price products appropriately, with the help of accurate product cost information.
    Reveal unnecessary costs that become targets for elimination.

Source: https://www.business-case-analysis.com/activity-based-costing.html
Best Regards,
Fahmida Emran
Lecturer,
Department of Business Administration
Faculty of Business & Economics
Daffodil International University