Become an Activity Based Costing Expert

December 9, 2022

Sales has their ABC “Always Be Closing” as popularized in the classic movie Glengarry Glen Ross (1992) and accounting has its own ABC with Activity Based Costing. 

Maybe you are new to accounting or moved into a new role, company, or industry where Activity Based Costing is a more relevant function. 

While Activity Based Costing is more prevalent within the manufacturing industry, it is an equally important costing method across other industries that manage many activities to reach their final product or service. 

Investopedia offers this definition of Activity Based Costing:

"Activity-based costing (ABC) is a costing method that assigns overhead and indirect costs to related products and services. This accounting method of costing recognizes the relationship between costs, overhead activities, and manufactured products, assigning indirect costs to products less arbitrarily than traditional costing methods. However, some indirect costs, such as management and office staff salaries, are difficult to assign to a product."

Nicolas Boucher is a LinkedIn influencer on the topics of FP&A, Accounting, and Finance. 

He released a short and informative overview of ABC. 

Access the ABC Guide