Activity Based Costing Excel Template
Now you can represent all the activity flow of your business in a seamless way with this editable activity based costing PowerPoint template and derive fruitful results without much effort. Every business needs to compile a resourceful graph of its activity to derive tangible results to work in the future, and this extensively researched PowerPoint template will help you to attain the same.The activity based costing presentation consists of 14 editable PPT slides, so that you can elucidate the activity flow of your business and save your time, with this professional presentation. Since the template set is entirely editable, all you need to do is input your relevant values to give it a personalized touch. It will save you hours of hard work while maintaining an utmost professional standard, letting you attain everything you need related to Activity Based Costing at a single place.The set will help you show the relation between expenses, inventory, and activity pool. You can also co-relate the aspects of expenses and inventory. These strong opening slides are followed by some other informative slides that feature high-quality graphics.
It can help you showcase the activity graph of the organization and how your company has grown in the past. The basic workflow of various activities and respective resource allocation can be depicted without any hassle. You can also provide an in-depth breakdown of the steps related to a respective task/activity, which is from identifying the activity assigning cost, preparing the reports, and so on. With its premium graphics and a high-quality representation of information, all you need to do is add the relevant content to make it flawless and customized.This presentation template is easy to download and features high definition graphics that can help you create a professional impression. The set is Time saving and extremely reliable to provide a complete overview of your organization's activity.
Here is How to Perform Activity Based Cost Analysis in Only a Few Minutes, Identify Your Real Cost-Profit Information, Improve Your Current Cost-Profit Structure and Make Profitable Decisions for Your BusinessStudies have shown some interesting facts about activity based costing. While most business managers are aware of the power of ABC and the benefits of drastically improving their businesses by making relevant and fact based decisions, only a small percentage of them actually use ABC.
The 3 frequently mentioned issues when it comes to implementation of ABC are: 1. ABC Implementation is ExpensiveActivity based costing systems are expensive to develop and implement and they require continuous investment, maintenance, training and support.
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Many business managers are not confident that the potential benefits will justify the large investments required by their organizations. ABC is Time ConsumingDeveloping and implementing ABC is time consuming for every company. The business requirements have to be put in place, the organizational processes must be analyzed and clearly outlined and employees must be trained in order to use the system. External help from ABC consultants is necessary during development which takes anywhere from a few months to more than a year for the entire working system to be in place. It’s Hard to Convince Decision MakersIt is challenging to convince management to invest the money and time in developing the ABC system. Implementing ABC and developing it into a major business initiative for the long run takes a real consideration by business stakeholders. They have to envision some real tangible benefits in order to make the go decision.
There is a Better and Smarter Alternative to Get All the Benefits of Having your ABC System Without Making Any of the Investments Mentioned Above and Without Taking Any Risk for Your BusinessNow with the ABC Software for Microsoft Excel you can develop your Activity Based Costing analysis in a matter of minutes! This simple yet very powerful ABC application for Excel users gives you all the benefits without the hard part of risk, time and money investments.The ABC for Excel has been already used by thousands of organizations worldwide in any market and industry. It doesn’t require any ABC training or expertise and any Excel user can take advantage of this activity based costing tool.This product will help you identify the real cost in your business and it’ll open new perspectives into how you see your business. Having the real product and service costs allows you to make smart decisions and improve your profitability in addition to cutting costs and making informed decisions based on facts.“ABC for Excel helped us improve our profitability in less than 1 month after we started using this product.”Janet D., Operations Manager“The new ABC information helped us identify what was wrong and it was very easy to focus on reorganizing and streamlining our existing business processes and activities.”Mike T., Business Owner“This is one of those tools you can use daily and apply to any business case. Now I am able to use ABC analysis in addition to traditional financial reporting and analysis.”Ben W., Management Consultant ABC 101: What is Activity-Based Costing?Activity Based Costing – ABC Costing Approach is a management accounting method that has helped many companies improve their profitability and cost structure.
ABC costing identifies opportunities for management to improve pricing, products, services, operations and key business processes in order to improve competitiveness. Critical information that has been hidden by using traditional accounting approaches can be discovered by using activity based costing. To compete in the marketplace management must change the cost and profit management and reporting practices.Activity Based Costing is a management accounting approach which allocate all direct and indirect (overhead) costs to cost objects (products and services) in order to help management understand critical business information.
ABC allocates direct and indirect costs to products and services based on the level of activities used to create and deliver those products and services.Activities such as purchasing, design, production, sales, marketing and customer service are utilized by different products and services (cost objects) based on their complexity and business requirements. Compared to traditional accounting, activity based costing is a decision making tool which provides more accurate cost and profit information and allows management to understand the cost and profit drivers and improve their business. Activity-Based ManagementActivity Based Management uses activity based costing information to maximize value for the customers and other stakeholders and improve profitability. Management allocates resources to critical business processes, products and customers and improves overall efficiency as well as create opportunities for cost reduction and product, service and process improvement. By identifying costs of activities and activity utilization by different products and services decision makers have accurate and timely information and are able to make better and more effective business decisions. Activity Based Costing also identifies value added activities (activities which create value for the customer and the company) and non value added activities (activities which are currently performed but they do not create value for the customer nor for the company). How ABC Works?The overall objective of ABC Costing System is better understanding the overhead / indirect costs and profitability.
What will change with ABC? While the overall costs and profit will remain the same the ABC Costing will inform management about profitability at the product level.Activity Based Costing will allocate costs to products and services based on the level of resource utilization by different business activities.
Each indirect cost is driven and at the same time can be controlled, planned and managed based on the business model and processes used by the company.For example, the costs of each department and activity is driven by the company’s business model or the way the company does business (ex: employee hours, number of machine hours or number of shifts will drive the cost of each activity). Manufacturing as well as service companies can use ABC to assign costs to activities and activities to products and services in order to measure profitability.The ABC approach includes allocation of indirect costs to departments, costs from departments to activities and costs from activities to cost objects. For example, every organization has departments which will vary based on the business (groups / teams such as sales function / department, warehouse department, purchasing department, administration, etc.). Indirect Costs from the General Ledger can be assigned by using percentage based on utilization level – for example, the rent cost can be allocated 70% to the warehouse department, 20% to administration and 10% to Sales and Marketing Department depending on the square feet used by each department.Next, each department performance activities – for example, the design department may perform product development activities, the sales department will perform sales calls, quoting and sales presentations. Depending on the time spent by the sales force on each of these activities their indirect costs can be allocated to each activity – for example, 30% sales calls, 30% to quoting and 40% to sales meetings and presentations.Finally, the costs of each activity is allocated to the cost objects (products and services).
Activity Based Costing Excel Template
For example, let’s consider the sales meetings and presentations activity performed by the sales department: based on the time spent by the sales force on selling and promoting each product or service the cost of sales meetings and presentations activity can be allocated 50% to Product 1, 30% to Product 2 and 20% to Product 3.Different products and services require more or less activities in creating them and selling them to the customers. This simple example demonstrates the way ABC allocates and calculates indirect costs and assign them to cost objects which is the overall objective – each cost object / each product and service will be measured at the net profit level.Gross Margins / Gross Profit can be misleading because some products and services will be profitable at the gross margin level but they might be losers at the net profit level if they consume too much of the company’s activities. On the other hand, some products and services with lower gross margins might be very profitable at the net profit level because they are simple to create and deliver to the customers. The following example demonstrates this point:Business processes and operations are performed by different activities. Each activity has cost drivers which are used to calculate or estimate the cost of activities.