ACTIVITY BASED COSTING
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Activity based costing : Activity based costing (ABC) is an alternative approach to product
costing.

It is a form of absorption costing, but , rather than absorbing overheads on a production
volume basis it firstly allocates them to cost pools before absorbing them into units using
cost drivers.
Cost pool : A cost pool is an activity that consumes resources and for which overhead costs are
identified and allocated. For each cost pool, there should be a cost driver.
Cost Driver : A cost driver is a unit of activity that consumes resources. An alternative
definition of a cost driver is a factor influencing the level of cost.
Factors that should be considered when selecting cost drivers for an activity based costing
system.
The cost driver for a particular activity is the factor that causes a change in the cost of the
activity. For the cost driver to be useful there must be an identifiable relationship between the
cost and the cost driver, i.e. changes in the number of cost drivers must cause corresponding
changes in the total cost incurred on the activity.
Another major consideration is the ease of accurately recording the number of cost drivers
incurred. If the process of recording the cost drivers is very complex and time consuming then
the cost of the recording system might outweigh the benefits derived from the information
obtained.
1 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
ACTIVITY BASED COSTING
TYU-6
2 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
Solution
3 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
4 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
5 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
6 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
Example-1
7 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
Solution
8 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
TYU-1
9 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
Solution
10 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
11 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
12 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
TYU-2
13 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
Solution
14 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
15 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
16 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
TYU-5
17 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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ACTIVITY BASED COSTING
Solution
18 MD. SHARIFUL ISLAM TUTUL (CMA FINAL), CELL. NO. 01771414539.
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