Archive / 2.04 Activity Based Costing (ABC)

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Treatment of materials in production

Materials in production are what the finished product consists of. Materials and time spent on putting them together. In production you use two types of materials – those that the product mostly consists of and side materials to help you to put the product together, i.e. glue, screws and so on. When we talk about […]

Basics of activity based costing (ABC)

Something like activity based costing or ABC comes into the scene when we are talking about some sort of production activity. Production essentially is a composition of procedures, which use materials, services etc to produce the end result, which normally are sellable goods. As such the company purchases materials, buys services, develops internal expenses (personnel, […]

Cost centers on the income statement

In a small company there is usually an admin team comprising of one accountant, assistant and manager, a sales team and perhaps a production and logistics team. While the last two are considerable in larger companies, it shows that within one company there may be numerous departments. Although those departments vary depending on the business […]