costing methods

Activity Based Management enables an organization to control its activities properly, as a result of which performance and customer-orientation are increased.

Zero Based Budgeting is a reverse approach of traditional planning and decision making with respect to budgeting. In Zero Based Budgeting all managers are required to justify all budgeted expenses, not just the changes in the budget of the previous year. The baseline in Zero Based Budgeting is not last year’s budget but “zero”.

Absorption Costing is a cost calculation method that represents the information of all expenses that are associated with the production process of a product or service.

Unlike traditional cost price systems, activity based costing does establish a causal link between the cost drivers and indirect costs. By passing on this insight to the responsible cost drivers, a transparent and cost-conscious conduct is stimulated.