ABC Cost Models
Activity Based Costing Cost Models
We build ABC (Activity Based Costing) Cost Models for accounting and finance departments. Our ABC Cost Models have more information and better information than cost models that have been constructed with traditional methods.
Our ABC Cost Models will make your financial reports more accurate and far easier and faster to prepare. Our ABC Cost Models will also be useful to your Marketing, Operations, IT and Human Resources managers. Finally, our ABC Cost Models will be delivered at economical costs below your current costs.
Cost models provide accounting and finance departments with information about the cost of products, customers, processes and organizational units such as branches.
Preparing accurate financial reports and filings requires accurate cost models. Profits, return on investment, budgets, and tax filings all require and rely on accurate cost reports.
Traditionally, accountants have prepared cost models for labor costs by surveying, interviewing and observing employees. These methods often produce inaccurate information results for these reasons:
- Employees do not nor can not remember how much time they spend on products, customer segments and internal departments. If the company has a large product and customer segment list, such as a bank that may have over a hundred products, it becomes an impossible task.
- The sample size is small because gathering data from many locations, departments, branches etc. is prohibitively time consuming and expensive.
- Accountants lack the knowledge, skills, and technologies that are needed to systematically collect large amounts of data, calculate the values and allocate it accurately.
ABC Cost Model Exhibits
The exhibits below are from ABC Cost Model projects we have conducted.
This exhibit is the ABC Cost Model of an insurance company’s Property policy product. It provides all of the information that is needed to comply with FASB 60.
This exhibit is the ABC Cost Report of a pharmaceutical company’s product projects in the Quality Control department.
This exhibit is the ABC Cost Report of a pharmaceutical company’s plant support costs in the Quality Control department.
This exhibit is the ABC Cost Report of a pharmaceutical company’s product costs for package engineering.
Cost models will give you the ability to maximize every opportunity to improve your profits.
Our experience has always been that cost models quickly pay for themselves many times over.
If you would like to lead your industry in profitability… we should talk and look at how you can do that. Call us, our number is in the footer below.