Activity Based Costing (ABC)

6 Definitions

A model that identifies activities and assigns costs to activity resources used for cost accounting.
An accounting technique that allows an enterprise to determine the actual costs associated with each product and service produced by that enterprise without regard to the organizational structure of the enterprise
defined by 6SixSigSigma
A cost accounting methodology that assigns costs to activities based on their use of resources, and assigns costs to cost objects (products, functions, projects) based on their use of activities. It attempts to precisely allocate overhead based on the real factors that create costs.
defined by Lean Affiliates
Activity Based Costing. Costs are allocated to products via cost drivers for various categories linked to the costs of the manufacturing activities. Refer to an accountancy text. Conventional Accounting can make it difficult to calculate the benefits of Lean Six Sigma improvements. ABC is also problematic. Throughput Accounting (Theory of Constraints) has been developed to support flow processing.
An accounting system that assigns costs to products based on the amount of resources used to design, order or make a product.
A process-oriented approach to accounting that starts by determining how much it costs to perform each activity and then adds up activity costs to determine process costs, an so forth. The idea is that you add together all the costs in a complete value chain, subtract the costs from the income for the product or service produced by the value chain, and determine the profit on the process.
defined by BP Trends