Activity Based Costing Advantages Disadvantages

• More accurate costing of products/services, customers, SKUs, distribution channels
• Better understanding overhead
• Easier to understand for everyone
• Utilizes unit cost rather than just total cost
• Integrates well with Six Sigma and other continuous improvement programs
• Makes visible waste and non-value added
• Supports performance management and scorecards
• Enables costing of processes, supply chains, and value streams
• Activity Based Costing mirrors way work is done
• Facilitates benchmarking

Activity Based Costing Disadvantages

• More time consuming to collect data
• Cost of buying, implementing and maintaining activity based system
• Makes waste visible which some executives and managers don't want their boss to see

Call or email below John Antos or Jim Brimson at 972-980-7407 to find out how Activity Based Costing can help you reach your goals and give your peace of mind