ACTIVITY BASED COSTING
Southern Steel Mesh

Q1: Does Southern Steel Mesh practices Activity Based Costing (ABC)? NO
Q2: If Southern Steel Mesh does not use ABC, what is the method of costing that do company use and kindly explain about it. VARIABLE COSTING
Q3: What are the constraints that company face during handling the activities in manufacturing? Sometimes we will gain more profit but sometimes we have to bear some of loss. Eventhough it will not effect our company but we have to consider this as our problem.
Q4: What are the strategic planning that your company used in handling the operations?

ABC allocates overhead costs in two stages:
Stage 1: Identify overhead or resource costs are allocated to activity cost pools. I. What work or activities that company do?
We are company that process a mesh and we supply the steel to a lot of construction and manufacturing company . II. How much time do you spend performing these activities?
Our machine is actually functioning 24 hours in order to make sure we that we can managed all the orders that we received and gain more profit .

III. What resources are required to perform these activities?
In order to perform this activities we require a lot of resources such as human resource and

IV. What value does the activity have for the product, service, customer, or organization?

Stage 2: Assign Resource Costs to Activities
Typical resource consumption cost drivers include the number of :

(1) labor hours for labor intensive activities
8 hours per day * (2) employees for payroll-related activities

(3) setups for batch-related activities
(4) moves for materials-handling activities
(5) machine-hours for machine repair and maintenance (6) square feet for general maintenance and cleaning activities.

COSTING FOR ONE MONTH

Activity | Consumption Cost Driver |