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Cost Accounting Project

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Contents
Concept of Cost Accounting……………………………………………………………………03
Introduction……………………………………………………………………………………..03
Traditional costing v/s activity based costing…………………………………………………..04
Need for an Activity Based Costing……………………………………………………………06
Stages in Activity Based Costing……………………………………………………………....08
Cost Drivers…………………………………………………………………………………….09
Classification of
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With the help of case studies of Siemens Electric Motor Works, John Deere Component Works, and Schrader Bellows, Cooper (1989) demonstrated that the ‘management objectives’ and ‘diversity of product mix’ determine the extent of the complexity in the design of activity-based cost management systems. The competitive environment in which the firm is operating, drives the need for activity-based costing.
A well-designed integrated cost management system will help the management of the company to identify opportunities for continuous improvement and point out unused capacity or capacity constraints, if any, and will facilitate the introduction of activity-based budgeting in the organization. The activity-based budgeting mindset makes all cost variable and attempts to match resource supply with resource demand.

Activity based costing Activity Based Costing (ABC) is a two-stage product costing method that assigns costs first to activities and then to the products based on each product 's use of activities. , ABC systems first accumulate overhead costs for each organizational activity, and then assign the costs of the activities to the products, services, or customers (cost objects) causing that activity. Activity analysis is the processes of identifying appropriate output measures of activities and resources (cost drivers) and their effects on the costs of making a product or providing a service.
In this way an
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