2. Matakuliah : COST ACCOUNTING
Tahun : 2009
Chapter 14 ACTIVITY ACCOUNTING: ACTIVITY BASED COSTING AND ACTIVITY BASED MANAGEMENT Learning 23, 24

3. Activity Based Costing (ABC)
A costing system in which multiple overhead cost pools are allocated using bases that include one or more non—volume-related factors.
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4. Levels of Costs and Drivers
In ABC, the bases used to allocate overhead costs are called drivers. A resource driver is a base to allocate the cost of resource to the different activities using that resource. An activity driver is a base used to allocate the cost of an activity to products, customers, or other final cost objects.
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5. Levels of Costs and Drivers
ABC recognizes activities, activity costs, and activity drivers at different levels of aggregation within a production environment.
The four levels commonly identified are:
Unit level.
Batch level.
Product level.
Plant level.
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6. Levels of Costs and Drivers
Unit level
Unit level costs are the costs that inevitably increase whenever a unit is produced. They are the only costs that always can be assigned accurately in proportion to volume.
Unit level drivers are measures of activities that vary with the number of unit produced and sold.
For example:
Electricity cost if electricity powered machinery is used in producing each unit.
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7. Levels of Costs and Drivers
2. Batch level Batch level costs are costs caused by the number of batches produced and sold. Batch level drivers are measures of activities that vary with the number of batches produced and sold. For example: Setup costs and most material handling costs.
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8. Levels of Costs and Drivers
3. Product level Product level costs are cost incurred to support the number of different products produced. They are not necessarily influenced by the production and sale of one more batch or one more unit. Product level drivers are measures of activities that vary with the number of different products produced and sold. For examples: Costs of product design, development.
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9. Levels of Costs and Drivers
4. Plant level Plant level costs are the costs of sustaining capacity at a production site. Floor space occupied is reffered to often as the plant level driver. For examples: Rent, depreciation, property taxes.
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10. Comparison of ABC and Traditional Costing
Traditional costing systems (unit based systems) are characterized by their exclusive use of volume related, or unit level, measures as bases for allocating overhead to output.
Distinctions usually exist between traditional and ABC systems are:
The homogeneity of costs within a cost pool.
ABC systems are two-stage costing systems, while traditional systems may be one- or two- stage.
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