Traditional costing answers, "What did we spend?" Activity-Based Costing answers, "Why did we spend it, and who should pay for it?"
Divide the total cost of the pool by the total number of driver units (e.g., shipping cost ÷500divided by 500 deliveries = per delivery). activity based cost definition
Are you using ABC in your organization, or are you sticking to traditional costing? Let me know in the comments! 👇 Traditional costing answers, "What did we spend
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Traditional costing answers, "What did we spend?" Activity-Based Costing answers, "Why did we spend it, and who should pay for it?"
Divide the total cost of the pool by the total number of driver units (e.g., shipping cost ÷500divided by 500 deliveries = per delivery).
Are you using ABC in your organization, or are you sticking to traditional costing? Let me know in the comments! 👇
🔍