WHAT IS ACTIVITY BASED COST MANAGEMENT?
Activity-based costing (ABC) is a costing method that
identifies activities in an organization and assigns the
cost of each activity to all products and services according
to the actual consumption by each. Therefore, this model
assigns more indirect costs (overhead) into direct costs
compared to conventional costing.
HOW IS ABCM USEFUL? (Outcomes of ABCM)
-
Precision in cost
allocation across departments
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Profitability insights
for products, customers, and regions
-
Accurate
transaction cost calculations
-
Core vs. non-core activity
identification
-
Strategic
decision-making improvement
-
Conflict resolution
across departments
-
HR benefits—optimized KRAs,
KPIs, and resource allocation
-
Continuous improvement
and cost optimization
Methodology:
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Financial trial balance
preparation
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Business process
and cost driver identification
-
Meetings with
departmental heads for deeper insights
-
Resource time and
expense allocation
-
Targeted action plans
for cost reduction
Assignment Duration:
For mid-sized companies with 10 departments, our typical
assignments span 4-6 weeks. Our dedicated team of 2-3
consultants ensures efficient delivery. Expect tangible
results including noticeable cost reduction and improved
asset utilization.