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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Steve B.

My email address is [email:1ddypter]frank.wade@imparja.com.au[/email:1ddypter]

I am very interested in developing an ABC model using Quantrix.

Quantrix is ideal for this type of modelling because each ABC implementation is unique. No two companies have the same activities and cost drivers etc. ABC is also a multi-dimensional costing system.

With the natural language formula editor in Quantrix it is a lot easier to maintain and audit the model.

However, the secret is to develop a model that is simple in design yet is very powerful. I recently evaluated an ABC software application, but, it was too complex, with process flow diagrams etc. and “black box” magic to calculate activity costs.

Steve, I will be pleased to receive your model and work with you to develop a commercial model. I will do the same for you and will develop an ABC model for you to review.

If you are interested I will be happy to discuss a commercial business venture with you regarding implementing ABC in the USA.

I currently have a similar business venture in Australia to implement ABC in the new fiscal year.

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