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What does ABC costing system focus on? 1- direct materials 2- direct labor 3- indirect costs

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Question added by هيثم ناجى , محاسب اول , الفيوم لصناعة السكر
Date Posted: 2016/01/17
Usman Yaqoob
by Usman Yaqoob , Executive Officer in Finance & Accounts Department , Jubilee Life Insurance Company

3 Indirect Costs

An approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. 

muhammaad Asim
by muhammaad Asim , Accountant - Receivable/Collection , EDCH (Business Unit of Etisalat)

3- Indirect Cost Activity based costing (ABC) assigns manufacturing overhead costs to products in a more logical manner than the traditional approach of simply allocating costs on the basis of machine hours. Activity based costing first assigns costs to the activities that are the real cause of the overhead. It then assigns the cost of those activities only to the products that are actually demanding the activities.

chetan shah
by chetan shah , Accounts Manager

It focus on Direct Material 

Adnan Ullah
by Adnan Ullah , Floor Manager,Tele sales Representative & part of management. , Edata Solutions (out bound Call Center)

ABC focused on every single activity of the production. it includes all the direct material direct labor and FOH 

BIPIN SAI
by BIPIN SAI , accountant , Universal cold Store

ABC costing system is connected with Direct Materials

 

هيثم ناجى
by هيثم ناجى , محاسب اول , الفيوم لصناعة السكر

correct answer is the third option indirect  (over head) costs

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