Activity-Based Costing for Better Cost Management
Author:K. Mohan, Lecturer Babu P. George, Ph.D.
JEL:
DOI:
Keywords:Cost management;
• Activities and types;
• Cost and activity drivers;
• Activity based costing (ABC);
• ABC implementation;
• ABC applications.
Abstract:
Implementing change in
management, successfully and profitably,
is the greatest challenge for modern
enterprises. Innovation in strategies,
marketing performance, role of
competition, change in technology, change
in customer needs, management initiatives
are all facts of life in the global
environment today. Cost management
works with its customer to manage change
more profitably. Activity-Based Costing
(ABC) is a new methodology of product
costing which measures the cost of
products more accurately. Overhead
allocation is much more sophisticated
under this system. This paper attempts to
highlight the need, importance and
methodology of ABC for better Cost
Management in modern enterprises.