Hi,
Activity-Based Costing provides helps assign overhead costs to products, customers, and other object in a way that is more correlated to cost drivers than traditional overhead allocation methods. The definition of cross-functional business processes in addition to the functional cost center standpoint opens a further dimension of overhead transparency in cost accounting.
Further, it can be of two types:
1) Parallel Activity-Based Costing: With parallel ABC and delta versions, you can analyze important sub-areas of your organization. You can include the process model into your integrated value flow at a later time after detailed analysis of the initial results. Delta versions u2013 that is, alternative calculations u2013 provide critical information for managerial decision-making.
To activate parallel ABC in the Implementation Guide (IMG) for the Activity-Based Costing component, choose Controlling -> Overhead Controlling -> Activity-Based Costing -> Activating Activity-Based Costing in Controlling Area.
Select a controlling area and choose Activate components/control indicators. You must activate parallel ABC individually for each controlling area in question. Set the Activity-Based Costing indicator to "Component active for parallel calculation".
2) Integrated Activity-Based Costing: Integrated Activity-Based Costing (ABC) fully integrates the Activity-Based Costing component (CO-OM-ABC) in the value flow of the Controlling component (CO), in particular the Product Cost Controlling component (CO-PC) and the Profitability Analysis component (CO-PA). Integrated ABC posts costs and quantities as real values, not statistical ones, to the participating objects.
To activate integrated ABC in the Implementation Guide (IMG) for the Activity-Based Costing component, choose Controlling -> Overhead Controlling -> Activity-Based Costing -> Activating Activity-Based Costing in Controlling Area.
Select a controlling area and choose Activate components/control indicators. Set the Activity-Based Costing indicator to "Component active for parallel and integrated calculation".
If helpful, please assign points.
Regards
Manju
Bluesky
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.