Activity Based Costing (ABC) Step-By-Step - Stage 1 Allocation - By Mike Werner (ABC Video 2 of 3)

Activity Based Costing (ABC) is a method of allocating overhead (indirect) costs to products, services or business segments. When compared to traditional overhead allocation, ABC is viewed as more accurate method and if provides various other benefits.
This video (2 of 3) demonstrates how to allocate overhead costs to various business activities. In the next and probably most important video in the series (3 of 3), we demonstrate how to allocate the cost of the business activities to products and discuss the advantages of using ABC.
This video is the second in a series of three videos on ABC.
Introduction to Activity Based Costing - An Overview (ABC Video 1 of 3) • Introduction to Activi...
This video: Activity Based Costing (ABC) Step by Step - Stage 1 Allocation - Allocating Overhead Costs to Activities (ABC Video 2 of 3) • Activity Based Costing...
Activity Based Costing (ABC) Step-by-Step - Stage 2 Allocation - Allocating Overhead Costs to Products (ABC Video 3 of 3) • Activity Based Costing...
If you would like to learn the basics of ABC, how it works, and its impact on product cost accuracy, management decisions and cost control, these videos are for you!
In the first video, we introduce the concept of how ABC and provide an overview of how it can be used to allocate manufacturing overhead costs to products.
In this video, which is the second video in the series, we explore a simple example and demonstrate, step-by-step how overhead costs are allocated to smaller, activity cost pools. This is sometimes called ABC Stage 1 Allocation.
In the third and probably the most important video in the series, we continue the example and demonstrate, step-by-step how overhead costs are allocated to products using traditional overhead allocation and then, how manufacturing overhead activity cost pools are allocated to individual products using ABC. This is sometimes called ABC Stage 2 Allocation. Also in the third video, we explore the impact of ABC on product cost accuracy, management decisions, and cost control.

[@MikeWMiami]

Thank you for still another easy to follow informative video!

[@accountingstepbystep2229]

Thank you for watching and for the nice comment!

[@MikeWMiami]

@@accountingstepbystep2229 Thanks!

[@meevwhy3704]

Thank you!

[@c.a.m.6276]

Very useful, and rich in each detail of the steps of the ABC method. Thank you for posting such an outstanding presentation (from Brazil)

[@accountingstepbystep2229]

I am sorry for this late reply and I apologizes for not seeing your comment earlier. Thank you so much for the very nice comment and encouragement all the way from Brazil! Thank you! I am very happy the video was helpful. Thank you for your comment and for viewing my video. Very best regards, Mike.