Topic 6 : Activity based costing/ Management

 Implementing ABC
o Identify and define activities.

o Trace costs to activities and cost objects

o Assign costs to activity

o Calculate activity rates

o Assign costs to cost objects.

o Prepare management reports

o Benefits of decentralization:

 Limitations

 Activity based management (ABM)

The use of activity-based cost information for management purposes, such as cost reduction
programs, cost modeling and customer profitability analysis