Basics of ABC Costing

ABC Costing The application of ABC costing techniques is simple and this presentation will walk through an example. The most complex part of an ABC system is establishing the system.

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

A Simple ABC Example

Management Reports The most common management reports prepared with ABC data are product and customer profitability reports. These reports assist companies in allocating their resources to the most profitable opportunities These reports also highlight the most profitable products and customers.

Customer A Margin Report One order for 27 cabinets

Customer B Margin Report Four orders; 100 cabinets sold in total

Product Margin Report Note no customer support included

Product Margin Report Customer support and organizational costs included