accounting problem solved for abc

2.  Activity-based costing (ABC) is
a costing methodology that identifies
activities in an organization and assigns the
cost of each activity with resources to all
products and services according to the actual
consumption by each.
 This model assigns more indirect
costs (overhead) into direct costs compared
to conventional costing.

3.  The increase or decrease in the total cost of
a production run for making one additional
unit of an item. It is computed in situations
where the breakeven point has been
reached: the fixed costs have already been
absorbed by the already produced items and
only the direct costs have to be accounted
for.
 Marginal costs are variable costs consisting of
labor and material costs, plus an estimated
portion of fixed costs (such as administration
overheads and selling expenses).

4.  It is a method of recording costs and
reporting profits;
 All operating costs are differentiated into
fixed and variable costs;
 Variable cost –charged to product and
treated as a product cost whilst
 Fixed cost treated as period cost and written
off to the profit and loss account

5.  It explains the analysis of cost into fixed and
variable costs. And semi-variable costs are
also segregated into fixed and variable
elements.
 For the said purposes, the fixed costs are
written-off the particular period in which
they are increased, i.e., they are not
associated with the cost of work-in-progress
or finished products.
 As a result, the profitability of the products
will be determined on the basis of
contribution

6.  fixed costs, indirect costs or overheads are
business expenses that are not dependent on
the level of goods or services produced by
the business. They tend to be time-related,
such as salaries or rents being paid per
month, and are often referred to as
overhead costs. This is in contrast to variable
costs, which are volume-related (and are
paid per quantity produced).

7.  Variable costs are costs that change in
proportion to the good or service that a
business produces.Variable costs are also the
sum of marginal costs over all units
produced. They can also be considered
normal costs. Fixed costs and variable costs
make up the two components of total
cost. Direct costs, however, are costs that
can easily be associated with a
particular cost object.