ABC basics.(activity-based costing)

Management Accounting (UK), June, 1996 by Kennedy, Alison

Adopting activity-based costing (ABC) can bring wider benefits to a company, and often product costing is not the main benefit which results from introducing activity-based management. ABC concentrates on analysing overhead costs within a business, and it seeks to find out the causal factor, or cost drive, which determines demand for use of a particular overhead resource, or activity. ABC originated in the manufacturing sector, but can also be used in the services sector.

Alison Kennedy offers a basic overview of activity based costing for those who have previously ignored articles on the subject but who are nevertheless now interested in acquiring an understanding of ABC

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