Question

list 2 australian or US based publicly listed manufacturing companies who use Activity based costing and activity based management.

Answer 1

2 US based publicly listed manufacturing companies which use Activity Based costing and activity based management are

· Ford Motor Company

· The Coca-Cola Company

Explanation:

Activity Based costing is a method of overhead allocation which allocates overheads based on activities consumed rather than traditional cost drivers like machine hours, direct labor hours or direct labor cost. It is an improved method of cost allocation which helps in accurate product costing and reliable product pricing. It involves study of activities of the firm and pooling them into activity cost pool. A cost driver is selected for each activity to calculate activity driver rate which is allocated to products based on activities consumed

Activity Based Management is the way of analysing and evaluating a company’s activities through Activity based costing approach and value chain analysis approach. It involves study of all activities and sees if each activity is value adding or not. Non-value adding activities are eliminated since it reduces the cost and helps in cost management.