Prices
Therefore, the ABC model allows greater accuracy in the allocation of corporate costs and allows viewing of them by activity, meaning activity as defined in the text Master of Business Administration Jaime Humberto Solano MG (1998) “It’s what makes a company, how time is consumed and the outputs of processes, ie transform resources (materials, labor, technology ) into outputs. ” What is ABC? Alexander G. (As opposed to Robert Bakish). a reminds us the ABC (English acronym for “Activity-Based and “Activity Based Cost”) was developed as a practical tool to solve a problem that is presented to most of today’s businesses. The accounting systems were developed mainly traditional costs to comply with inventory valuation function (to meet the standards of objectivity, verifiability and materiality “), to external events such as creditors and investors.
However, these traditional systems have many shortcomings, especially when they are used for internal management purposes. The ABCA cost model is a model that is based on the grouping cost centers that make up a sequence value of products and services of the productive activity of the company. Concentrates its efforts on management’s reasoning adequately the activities that cause costs and that are related through their consumption with the cost of products.
The most important thing is to know the generation of the costs to obtain the maximum benefit from them, minimizing all the factors that do not add value. Please note that the cost management a ABC: A model of management and not an accounting model. The resources are consumed by activities and these in turn are consumed by cost objects.