Advantage of ABC costing 1- valuation of inventory 2- eliminate add value activities 3- determine COGS 4- eliminate non value add activities

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Posted by:
Wa'el
22-July-2013

Accounting Cost Accounting Financial Accounting CMA Costing

Question added by Ahmed kandil , Cost Controller , Battour Holding Cpompany
Date Posted: 2015/03/06

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4 Answers

by Rasiya P.K , Financial Analyst , AL TAQWA ELECT.WARE TR.LLC

Answer is 4 )ABC Costing eliminates Non-Added value activities

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by AHMAD OMAR CMA-CertIFR , Accounting Manager , NADIA BAKHURJI ARCHITECTS & INTERIOR DESIGN CONSULTANTS

Activity Based-Costing eliminates the non value added activities

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by Muhammad Kassab CPA CMA CertIFR , Accounting Manager , Marine Buildings Landmarks

ABC Costing uses a complex way to allocate manufacturing overheads against final products, by grouping costs of resources used in the process in Activity Based Cost Pools rather than just using one single cost pool and distributing the cost to final products as in the peanut butter method.

Activities that use the same cost drivers will be grouped together then, and the costs in each cost pool will be allocated to final products based on the relevant cost driver.

so it is considered the most accurate way for COSTING, which means ACCURATE INVENTORY & COGS Measurement.

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