Activity-Based and Process Costing Techniques (Essay Sample)

Activity Based and Process Costing Techniques.
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The creation of long-term value is the top focus of any corporation. To accomplish this goal, resources must be directed toward enterprises, customers, and products that are capable of delivering profitable growth (Bilici & Dalci, 2008). The Bible contains a wealth of accounting principles, many of which can be deduced either directly or directly from the text. In this article, the Bible is connected to contemporary accounting philosophy in terms of different costing techniques.
The technique of activity-based costing(ABC), involves assigning the costs of resources to cost items like customers, services, and products based on the activities carried out for those cost items. This method of costing is predicated on the idea that the services or products that a company offers are the results of its operations, and that these operations require resources, each of which has its own associated cost. The resources costs are allocated to activities in terms of the activities (resource consumption drivers) that consume or use resources, or allocated to cost items based on the activities conducted for the cost items (activity consumption drivers) (Amirhossein, Fantahun & Akif, 2010).
Process costing is a technique of cost accounting in which the expenses involved during manufacturing/production are attributed to processes and then averaged out over the entire number of units produced. To accomplish this goal, process accounts about each process are created in the books of accounts. Each expense that is directly related to the process