Steps In ABC Costing

Steps In ABC Costing

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         • Determine how many units are made in each incidence of the cost driver .this is likely to vary for each unit
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           • Work out the Cost that is absorbed by the each unit of the finished product
       • Work out the cost incurred each time the Activity Occurs.
     • Identify the activity that causes the cost .In ABC terminology that activity is the cost driver ,but it might be better to take it as the "COST CAUSER"
   • Identify a fixed overhead cost .