Application of the Activity Based Costing System to the Wood Industry
Traditional costing methods assign indirect costs evenly, according to resource consumption bya product, while this consumption actually takes place in an uneven manner. To avoid such errors,entities seek to ensure best possible appraisal of uneven resource consumption, and the ABCmethod is one way...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Ovidius University Press
2016-01-01
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| Series: | Ovidius University Annals: Economic Sciences Series |
| Subjects: | |
| Online Access: | http://stec.univ-ovidius.ro/html/anale/ENG/2016/2016-I-full/Section-V/34.varteiu_daniel.pdf |
| Summary: | Traditional costing methods assign indirect costs evenly, according to resource consumption bya product, while this consumption actually takes place in an uneven manner. To avoid such errors,entities seek to ensure best possible appraisal of uneven resource consumption, and the ABCmethod is one way of achieving this goal. The ABC method starts from the observation that it’s notproducts that consume resources but activities, and the entity’s activities are used by products.
Costing through this method requires taking the following steps: identification of activities,assessment of resources consumed by each activity, determination of cost drivers and calculationof unit costs for each driver, and allocation of activity costs for each cost object. |
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| ISSN: | 2393-3127 2393-3127 |