Activity Based Costing Analysis is much easier and more useful especially for non-accounting employees. 

Activity Based Costing Analysis looks at Activity Unit Cost Information

Simply looking at expenses for wages, phone, travel, supplies, and computer is not very useful for many managers and executives. Expenses information alone does not tell what the problems are and expense analysis doesn't tell you whether you are improving.

With activity based costing you can calculate the unit cost of your activities. Once a manager knows that the average unit cost to:

• hire an employee
• make a sales call
• pay an invoice
• develop a new product
• update servers
• process a purchase order

then they can track this over time to determine if they are improving.

Activity Based Costing Analysis looks at Performance

With activity based costing analysis, executives and employees can look at performance. They can determine Performance Measures for each activity

• hire an employee: average time to hire and quality of hire as judged by department where employee will work
• make a sales call: average number of sales calls per sale and average sales revenue per sales call
• pay an invoice: invoice payment accuracy and percentage of discounts taken
• develop a new product: average time to develop and average sales per new product or service.
• update servers
• process a purchase order

then they can track this over time to determine if they are improving.

Activity Based Costing Analysis looks at Waste

Activity based cost analysis looks at non-value and waste of each activity. It seeks to drive out waste by identifying cost drivers and creating improvement programs to reduce and eliminate those cost drivers.

Call or email below John Antos at 972-980-7407 to find out how Activity Based Costing can help you reach your goals and give your peace of mind