Activity Based Management ABC Activity Based Costing pl

Activity Based Management ABC – Activity Based Costing (pl. rachunek kosztów działań) ABCM – Activity Based Cost Management ABM – Activity Based Management (pl. zarządzanie kosztami działań) § Evolution of the its use: –. . . From a system oriented at product unit cost calculation. . . –. . . to one concentrated on process and activities management. 1

Use of ABM information § § To grow the enterprise: – eliminate non-value adding activities – improve processes and activities To maintain operational level: – – identify non-value generating activities set priorities to improve processes and their implementation separate and eliminate cost-generating variables specify product/service costs To lower production volume: – reduce costs – reduce production capacity – manage downsizing To increase production capacity: – specify product/service costs – take decisions regarding products/services – specify capacities of production processes (analyse bottlenecks) 2

ABM cycle Processes Take decisions § improve processes § project costing § reduce costs § limit economies of scale § redefine economic processes § activity management § benchmarking Measuring the effectiveness § budgeting § profitability analysis § measuring effectiveness of activities § measuring effectiveness of projects § predict / value costs § target costing § price calculation models § valuing inventory § utilise production capacity 3