Activity Based Costing Calculator

Activity Based Costing Calculator calculator can be used to allocate overhead costs more accurately by identifying activities and their associated costs.

Input Parameters

Calculation Results

Calculation Formula

Cost per Activity = Total Cost / Total Volume

Where:
Total Cost = Sum of all activity costs
Total Volume = Sum of all activity volumes

Activity Based Costing Calculator Calculator Usage Guide

Learn how to use the Activity Based Costing Calculator calculator and its working principles

How to Use the Calculator

  1. Enter the name of each activity in the respective fields.
  2. Input the total cost associated with each activity.
  3. Enter the total volume or quantity for each activity.
  4. Click the "Calculate" button to compute the cost per unit for each activity.
  5. The results will be displayed in the respective fields.

Working Principle

Activity Based Costing (ABC) is a costing methodology that identifies activities within an organization and assigns the cost of each activity to all products and services according to the actual consumption by each. This method provides a more accurate way of allocating overhead costs compared to traditional costing methods.

Example

Suppose you have two activities: Machining and Assembly. The total cost for Machining is $10,000 with a volume of 1,000 units, and for Assembly, the total cost is $5,000 with a volume of 500 units. The cost per unit for Machining would be $10 ($10,000 / 1,000 units), and for Assembly, it would be $10 ($5,000 / 500 units).