An activity cost pool in activity-based costing groups indirect costs according to activities to allocate costs effectively.
An activity measure in activity-based costing (ABC) systems is a metric that gauges the volume or rate of an activity. It serves as a basis for cost allocation within an activity cost pool, correlating changes in the measure with changes in total activity cost.
Activity-Based Costing (ABC) is an accounting method of cost allocation that assigns costs to products and services based on the activities and resources that they consume.
Activity-Based Management (ABM) involves using insights gained from Activity-Based Costing (ABC) to improve the overall management and efficiency of an organization. It focuses on identifying activities, understanding cost drivers, and analyzing how resources are consumed based on activity levels.
In management accounting, an allocation base is used to distribute costs to cost objects. A crucial component of both traditional costing systems and Activity-Based Costing (ABC), the allocation base plays a significant role in accurate cost allocation.
Duration Driver refers to a measure of the amount of time required to perform an activity, especially when there is significant variance in the time taken to complete different activities.
