Activity Based Costing

Transforming the Way a Company Thinks

If a product or service you sell was unprofitable, would you eliminate it? Seems like an easy question to answer. However, it becomes much harder when you question whether or not you know the true cost. Many businesses allocate business overhead proportionally to direct costs. When two products don’t use the same overhead costs, your numbers are skewed. Activity Based Costing (ABC) helps you determine more realistic costs so you can make better business decisions.

With ABC, we will help you define overhead costs and assign them by product, process, customer or channel. This is done by analyzing direct, indirect, selling and administrative costs and assigning them to the end users to which they relate. You will be able to understand how activities impact costs and, more importantly, identify process improvement opportunities.

Make decisions based on facts and not a “gut feeling.” ABC can change the way you:

  • Sell and price products and services
  • Process orders and structure transactions
  • Arrange workflow and warehouses
  • Partner with suppliers and principals
  • Think about every facet of your operation

Strategic-minded organizations use ABC to create change. Invariably, it translates to higher profits, too.

Activity-Based Costing Experience: Our business advisors have first-hand experience inside manufacturing companies that utilized activity-based costing and have helped numerous area businesses make the leap into ABC. We not only analyze your current situation, but provide comprehensive solutions and implementation processes tailored to your business.

Before you can embrace and implement ABC, you must first understand it. Contact us to learn more about how ABC can transform your business and the way you think about it.