"How much is this really costing me?" Cost accounting focuses on production costs – which fails to consider value-added processing to the product such as special labeling for shipping cartons or inventory analysis based on point of sale data. Activity-Based Costing traces all relevant costs to a customer, product or other item of interest.
Know the Signs
"It costs too much to process a payables invoice."
"I wish we could know how much this customer's special requirements cost us."
Benefits of an Activity-Based Costing Project
Faster – Be ahead of the market by identifying your activity-based "trouble-spots" early on.
Saves Money – Identify where your money is going more quickly, so you can invest in the most profitable areas immediately.
Better Decisions – By knowing every day where your business's money is being used, you can make better decisions more consistently, which will not only provide cost savings in the short-term, but provide potential profit opportunities in the long-term.
Activity-Based Costing Case Study
If you have questions about activity-based costing, send Todd a message or call at 336.297.4200.