Management Cost A method of accounting which provides for Any IT solution that captures, SAAM Accounting Accounting/ accumulating and recording of all the generates, monitors, process or Manual Activity Based elements of cost incurred to accomplish a otherwise used to support the Costing (ABC) purpose, to carry on an activity or operation, capabilities identified in the or to complete a unit of work or a specific definition job. Cost accounting approach concerned with matching costs with activities (called cost drivers) that cause those costs. It is a more sophisticated kind of absorption-costing and replaces labor based costing system. ABC states that (1) products consume activities, (2) it is the activities (and not the products) that consume resources, (3) activities are the cost drivers, and (4) that activities are not necessarily based on the volume of production. Instead of allocating costs to cost centers (such as service delivery, marketing, finance), ABC allocates direct and indirect costs to activities such as processing an order, attending to a customer complaint, or delivering a service
Management Accounting Cost Accounting/ Activity Based Costing (ABC) A method of accounting which provides for accumulating and recording of all the elements of cost incurred to accomplish a purpose, to carry on an activity or operation, or to complete a unit of work or a specific job. Cost accounting approach concerned with matching costs with activities (called cost drivers) that cause those costs. It is a more sophisticated kind of absorption-costing and replaces labor based costing system. ABC states that (1) products consume activities, (2) it is the activities (and not the products) that consume resources, (3) activities are the cost drivers, and (4) that activities are not necessarily based on the volume of production. Instead of allocating costs to cost centers (such as service delivery, marketing, finance), ABC allocates direct and indirect costs to activities such as processing an order, attending to a customer complaint, or delivering a service Any IT solution that captures, generates, monitors, process or otherwise used to support the capabilities identified in the definition SAAM Manual
Financial%20and%20Administrative%20Business%20Functions%20V3.docx