Activity Based Costing (ABC)

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Activity Based Costing (ABC) is a multi-dimensional costing system. It replaces the traditional costing systems and provides more accurate and relevant costs of business processes, particularly for product pricing/profitability purposes.

In ABC, costs are assigned from General Ledger accounts to activities by activity drivers and activity performance is measured by cost drivers. An activity may have multiple cost drivers and business processes can be made up of multiple activities.

The two dimensional nature of spreadsheets is not suited for ABC and it is generally necessary to buy expensive database software applications that have limited user-definability.

Because Quantrix is a very powerful multi-dimensional modeling tool, it is very suited to the multi-dimensional nature of ABC.

I was therefore wondering if anybody has developed an ABC model in Quantrix and whether or not they have a Quantrix ABC template or beta model that they could email to me.

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Frank,

Agreed – Quantrix could be an ideal tool for preparing an Activity Based Costing model: activities aggregated into business processes cutting across general ledger accounts and time… linked matrices to define drivers, etc…

So far, though, we do not know of anyone who is specifically doing this or who has prepared any templates for this purpose.

It would be great if you decide to develop something of this nature and would like to share it with other Quantrix users through the forum or other means. In the mean time, if anything comes up in this area, we’ll let you know.

Regards,

Chris Houle

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