Fundamentals of Activity Based Costing (Abc) in the Context of Project Management
Activity Based Costing
Table of Contents
Objective: 3
Activity Based Costing (A-B-C). 3
Oracle On Demand: 4
Deployment Options: 4
“Refresh” Activity 5
Current Costing Practice: 6
Limitations: 7
A-B-C Analysis: 8
Suggested Cost Pool: 10
Objective:
The purpose of this project is to elaborate on the fundamentals of activity based costing (ABC) in the context of project management. The opportunity is to develop an integrated management system utilizing ABC concepts to plan, measure, and control costs that allow managers to focus on process performance and to make informed decisions along the product/service/project life cycle.
We have tried to evaluate the current costing practice of a “Refresh” activity for various products offered as an Oracle On Demand service.
Activity Based Costing (A-B-C).
Activity Based Costing is a costing model that identifies activities in an organization and assigns the cost of each activity resource to all products and services according to the actual consumption by each: it assigns more indirect costs (overhead) into direct costs.
In this way an organization can precisely estimate the cost of its individual products and services for the purposes of identifying and eliminating those which are unprofitable and lowering the prices of those which are overpriced.
In a business organization, the ABC methodology assigns an organization's resource costs through activities to the products and services provided to its customers. It is generally used as a tool for understanding product and customer cost and profitability. As such, ABC has predominantly been used to support strategic decisions such as pricing, outsourcing and identification and measurement of process improvement initiatives.
Oracle On Demand:
Oracle On Demand hosts and manages Hyperion Performance Management applications, keeping them available, secure, and up to date, thus allowing customers to better formulate their business goals and strategies,
Table of Contents
Objective: 3
Activity Based Costing (A-B-C). 3
Oracle On Demand: 4
Deployment Options: 4
“Refresh” Activity 5
Current Costing Practice: 6
Limitations: 7
A-B-C Analysis: 8
Suggested Cost Pool: 10
Objective:
The purpose of this project is to elaborate on the fundamentals of activity based costing (ABC) in the context of project management. The opportunity is to develop an integrated management system utilizing ABC concepts to plan, measure, and control costs that allow managers to focus on process performance and to make informed decisions along the product/service/project life cycle.
We have tried to evaluate the current costing practice of a “Refresh” activity for various products offered as an Oracle On Demand service.
Activity Based Costing (A-B-C).
Activity Based Costing is a costing model that identifies activities in an organization and assigns the cost of each activity resource to all products and services according to the actual consumption by each: it assigns more indirect costs (overhead) into direct costs.
In this way an organization can precisely estimate the cost of its individual products and services for the purposes of identifying and eliminating those which are unprofitable and lowering the prices of those which are overpriced.
In a business organization, the ABC methodology assigns an organization's resource costs through activities to the products and services provided to its customers. It is generally used as a tool for understanding product and customer cost and profitability. As such, ABC has predominantly been used to support strategic decisions such as pricing, outsourcing and identification and measurement of process improvement initiatives.
Oracle On Demand:
Oracle On Demand hosts and manages Hyperion Performance Management applications, keeping them available, secure, and up to date, thus allowing customers to better formulate their business goals and strategies,