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Financial Consulting:
ABC Costing (Activity Based Costing)

ABC Costing refers to a costing method that facilitates the allocation and distribution of the different indirect costs, this depending on the activities carried out.

This system provides a solution to the problem that arises when establishing standard costs, since the value chain is not reflected in the production of the product and, therefore, many times, the price determination tends to be erroneous, which is reflected in losses for the business.

To avoid such a situation, we can help you identify what your real costs are to assign profitable prices.

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ABC Costing

Traditional costing

Costs

Consumed by

Assignment:

Based on alleged links or alternatives, such as MOD hours

Products

Activity-based costing

Resources

Consumed by

Resource generators:

costs are allocated to activities based on the effort expended.

Activities

Consumed by

Activity generators:

activity costs are assigned to products, based on consumption patterns.

Products

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