From the course: Excel: Management Accounting
Join today to access over 22,600 courses taught by industry experts or purchase this course individually.
Activity-based costing and applications - Microsoft Excel Tutorial
From the course: Excel: Management Accounting
Activity-based costing and applications
- [Instructor] In this video, we will explore an important area of management accounting called activity-based costing, or ABC. ABC has significant applications in manufacturing and many other service businesses. I'll walk you through what ABC does and the major steps in it. To begin with, you need to understand that activity-based costing is really an approach for allocating overhead costs. It was traditionally used in manufacturing, but the reality is that it can be used in service industries too, any industry that has both overhead costs, and direct costs associated with providing a particular product or service is potentially one where activity-based costing is useful. We define activity as an event that incurs costs. So that could mean producing a car, for example, it could also mean developing a new software product, or it could mean, for example, building a pool at a person's house. The idea here is that our cost driver is any factor or activity that has a direct cause and…
Practice while you learn with exercise files
Download the files the instructor uses to teach the course. Follow along and learn by watching, listening and practicing.
Download courses and learn on the go
Watch courses on your mobile device without an internet connection. Download courses using your iOS or Android LinkedIn Learning app.