CMA

Comprehensive study of cma covering fundamental concepts and advanced applications.

Introduction to CMACost Concepts and ClassificationBudgeting and Forecasting
Standard Costing and Variance AnalysisActivity-Based Costing (ABC)Decision Making and Relevant Cost Analysis
Cost Control in ManufacturingBudgeting for StartupsCMA in Service Industries
Mastering CMA Exam PreparationTime Management for CMA Students
Introduction to CMACost Concepts and Cl...Budgeting and Foreca...Standard Costing and...Activity-Based Costi...Decision Making and ...Cost Control in Manu...Budgeting for Startu...CMA in Service Indus...Mastering CMA Exam P...Time Management for ...
Advanced Topics

Activity-Based Costing (ABC)

A Modern Approach to Costing

Activity-Based Costing (ABC) assigns costs to products and services based on the activities they require.

How ABC Works

  1. Identify major activities in the organization.
  2. Assign costs to these activities.
  3. Allocate activity costs to products or services based on usage.

Why Use ABC?

ABC gives a more accurate picture of product costs, especially when products use different resources.

Real-World Results

ABC helps companies identify profitable products and cut unnecessary spending.

Examples

  • A hospital uses ABC to understand the true cost of patient care in different departments.

  • A tech company discovers some software features cost more to maintain than they earn.

In a Nutshell

ABC links costs to activities for more precise product costing.

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Decision Making and Relevant Cost Analysis
Activity-Based Costing (ABC) - CMA Content | Practice Hub