Name the different stages in Activity-based costing

December 7th, 2010 Comments off
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In cost accounting, besides looking at marginal and total costing, we have the activity-based costing where the stages or process involves the following:

Different stages/steps in activity-based costing are:

  1. Identify the different activities within the organization
  2. Relate the overheads cost to the identified activities
  3. Support activities are then spread across the primary activities
  4. Determine the activity drivers
  5. Calculate the activity cost driver rates
  6. Compute the overhead cost to be charged over the product by using cost driver rates

[ read about cost driver & business units with their different type of cost driver]

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