Shulou(Shulou.com)06/02 Report--

1 activity-based costing (add author Wechat ficodk for unwatermarked full version) 1.1 Overview

Due to the improvement of manufacturing automation, the proportion of direct cost in production cost gradually decreases, and the control of indirect cost will have a significant impact on product profits, while the diversity of product types and output makes indirect cost accounting more complex and changeable, and traditional accounting methods such as cost accounting sheet are difficult to meet the demand. SAP introduced activity-based costing (Activity Based Costing) to calculate indirect expenses quickly and accurately. It provides a flexible allocation method, more reasonable, accurate and transparent management of the circulation of indirect costs, and provides reliable data for cost analysis and decision-making. Activity-based costing takes activity as the core (activity is the business that consumes enterprise resources such as material procurement process, quality inspection process), and accurately collects the resources consumed by the activity to the relevant activities. Then, based on the appropriate cost drivers, the activity is assigned to the cost object that consumes (or receives) the activity, such as production order, etc.

Figure 16: 1 is a typical activity-based costing process in the manufacturing industry. the cost center collects production costs (or consumed resources) and carries the costs forward to production orders or other cost centers through activity type distribution. this process can be regarded as basic activity-based costing, but there are many limitations in the drivers of "cost center / activity type" accounting. For example, we can only use cost elements, activity-based man-hours and statistical indicators as the drivers of cost transfer, but in complex indirect cost accounting, these drivers often can not meet the specific calculation logic of enterprises. SAP expands a large number of available drivers by introducing "business processing / template", which can quickly realize complex indirect cost accounting.

Figure 16? 1 the accounting process of indirect cost center

1.1.1 related concepts

? Business process (Business Process)

SAP introduces the concept of business process in activity-based costing, which represents a complete business process such as quality inspection, material procurement and so on. The cost collected by business process may come from multiple departments, which is similar to internal orders and is a cross-departmental cost object. The business process reflects the causes of the cost, for example, the frequent quality inspection of a product at the initial stage of production leads to a higher inspection cost.

As the cost object of the accounting department, other cost objects consume the cost of the cost center because its quantity is not quantifiable, so the transfer of value can only be realized through apportionment and distribution. Only by combining the activity type can we realize the transfer of quantity and value based on the activity consumption quantity, but the activity type itself is not a cost object, and a cost center may output multiple activity types. Therefore, a complete business process is often composed of multiple cost centers and activity types, resulting in business execution costs scattered in each cost center, unable to fully measure the quantity and cost of business implementation. Business process can be regarded as the combination of cost center and activity type, and it is a cost object that can measure the amount of consumption. it can realize the transfer of value not only through allocation and distribution, but also through quantity distribution.

? Resource drivers (Resource Driver)

The cost center manages the resources of the enterprise, that is, the place where the cost occurs. Business process is the cause of resource consumption (cost). The resource driver is the measurement of the amount of resources consumed. For example, the number of quality inspections determines the time spent on manual work. From a technical point of view, the form of resource motivation is the number of cost center activities consumed by the process, or the statistical indicators of each process.

? Cost driver (Cost Driver)

The demand side of the business process is the cause of the business process. The cost driver causes the measurement of the business process and drives the occurrence and flow of the cost. For example, a product needs a sampling rate of 1%. That is, the number of product output multiplied by the sampling rate determines the demand quantity (cost driver) of the process, and the resource consumption (resource driver) is obtained by multiplying the labor hours consumed in each sampling inspection by the number of sampling processes. It can be seen that the definition and calculation of cost drivers can not be standardized, and different industries or enterprises have their own understanding and quantitative standards of cost drivers, so SAP introduces templates to achieve diversified and scalable cost drivers.

? Cost driven approach (Drive Method)

There are two ways of cost allocation: "push" and "pull". The way of "push" is to apportion the allocation, in which the sender collects the cost and decides the allocated amount, and the "pull" way, such as the activity allocation of the cost center, determines the allocated amount by the actual consumption of the receiver. " "pull" is the core idea of activity-based costing, which embodies the path and reason of cost circulation and makes the cost flow more transparent and specific, but at the same time, it is more difficult to implement, and it is necessary to have a more in-depth and detailed understanding of cost behavior.

As shown in figure 16: 2, for the two modes of "push" and "pull", the direction of the cost flow remains the same, but the driver of the cost flow is different. The "push" mode is simply to carry forward the cost from the place of occurrence to the destination, which is a pure value transfer, while the "pull" mode is based on the value distribution that the receiver consumes the number of activities, and the value flow is driven by the cost driver.

Figure 16? 2 comparison of "push" and "pull" of cost flow

1.1.1 activity-based costing process

Figure 16: 3 shows a typical activity-based costing flowchart. The output quantity and sampling rate of production orders determine the number of times of execution of the quality inspection process, and the calculation logic of the number of times of execution is maintained in the process template. The number of times of execution of the quality inspection process determines the number of jobs input from the process inspection and finished product inspection cost center (manual hours) The calculation logic of job quantity is maintained in the indirect activity allocation cycle (templates can also be used if the calculation logic is complex), that is, production drives the quality inspection process, the quantity of output is the cost driver, and the quality inspection process consumes the activities of the cost center. the number of quality inspections is the resource driver.

Fig. 16-3 flowchart of activity-based costing

1.1 related configuration

Before enabling activity-based costing, similar to cost center accounting, we also need to maintain the corresponding configuration in the system.

Path: IMG à Control à activity-based costing à OKKP-activating activity-based costing within the scope of cost control

Figure 16-4 activity-based costing for activating the scope of cost control

? Activity-based costing: controls how to activate activity-based costing.

Null-invalid component: do not activate activity-based costing.

The components of parallel computing are valid: all data flowing into the activity-based costing module are used as statistics and do not affect the actual cost flow, but only for analytical purposes.

ü 2-parallel and collective computing components are valid: fully activated activity-based costing.

Path: IMG à Control à activity-based costing à 0KW1-maintain a standard hierarchy for the scope of control

Similar to cost centers, business processes need to maintain a standard level in which all business processes must be included.

Figure 16-5 maintains a standard hierarchy for the scope of control

Path: IMG à control à activity-based costing, master data à business processing à 0KW2-define attributes

Define the properties available in the business process master data.

Figure 16-6 defines the cost attributes of the activity

1.1 Master data 1.1.1 create business processes

Path: SAP menu à control à activity-based costing master data à business processing à CP01-create

* Business process master data can also be maintained through the transaction code "CPH4N Standard hierarchy".

Figure 16? 7 create a standard hierarchy

Enter the business process number and enter into the main data maintenance screen during the effective period.

Figure 16-8 maintenance hierarchy scope-basic data

Switch to the organizational structure tab to maintain the organizations within which the business process is allowed to be used.

Figure 16-9 maintain the organizational structure

Switch to the Properties tab to maintain business process-related attributes, which are generally used for report analysis.

Figure 16-10 maintenance properties

Switch to the assignment tab to define the relevant parameters for the business process assignment.

Figure 16-11 maintenance process allocation parameters

* the purpose of each field is similar to that of the corresponding field in the job type master data. For more information, please refer to the "14.2.5 create Job Type" section.

1.1.1 create a template

SAP introduces templates to implement activity-based costing, which defines the logic of cost allocation. Indicators from logistics modules such as output quantity, purchase order quantity, inventory transfer times, as well as traditional activity types, statistical indicators, and even customized procedures can be used as cost drivers. A large number of driving factors can describe the causes of cost transfer more truly and flexibly. It not only provides more flexibility but also makes the implementation more complex. This section describes how to define cost allocation logic in a template.

Path: IMG à Control à activity-based costing à template à CPT1-maintenance template

Figure 16? 12 create / maintain templates

? Template: enter the ID of the template.

? Environment: the environment determines which cost objects the template can be used. each environment contains a series of processing functions to calculate cost drivers or resource drivers, which can correspond to fields in a specific data table or a function. Users can easily add customized processing functions to expand the cost drivers and resource drivers of the environment. Examples of common environments are as follows

001 Standard cost estimate / production order

Cost estimation of 003 without quantity structure

007 internal order

009 process order

010 cost collector

SBP business process

SCD cost Center / activity Type

SCI cost center

Enter to enter the template maintenance screen, call the processing function, and multiply the actual output quantity of the job type LABO01 by 0.01 as the assigned quantity of the business process.

Figure 16-13 calculation formula for maintenance job assignment

The lower right part of figure 16 is the processing function in the environment SCI. The required processing function can be called in the quantity calculation logic on the left side of the screen.

After the template is created, it needs to be assigned to the corresponding master data, and this template is assigned to the cost center, as shown in figure 16: 4.

Figure 16? 14 assign template to cost center

1.1 Application scenario 1.1.1 scenario Overview

The implementation of activity-based costing requires a large number of cost bases (activity types or business processes) and cost drivers, which is a great challenge for enterprise employees and information system implementation. due to the difficulty of implementation, the increase of labor costs, the uncertainty of implementation results and other reasons, few domestic enterprises fully implement activity-based costing, but for some critical or complex indirect cost accounting. Sometimes the use of activity-based costing will achieve unexpected results. This section simulates a simple activity-based costing process, as shown in figure 16: 15.

Figure 16-15 activity-based costing flow chart

The typical activity-based costing method pulls the cost from the sender to the receiver by backstepping. The template allocation must be carried out in the order of first cost driver allocation and then resource driver allocation. In this case, the template allocation of the production order is executed first, the consumption quantity of the quality inspection process is determined based on the cost driver "output quantity", and then the template allocation of the quality inspection business process is carried out. The consumption time of the type of quality inspection operation is determined based on the resource motivation "quality inspection times".

1.1.1 cost allocation from business processes to production orders

This step, the ① in figure 16-15, allocates the cost of the quality inspection process to the production order based on the cost driver "output quantity".

* for the configuration method of the production order template, please refer to the section "17.4.4 using the template to calculate indirect costs".

* for the execution method of the production order template, please refer to the section "18.5.1 calculation of indirect costs".

1.1.1 cost allocation from cost center / activity type to business process

This step is the ② in figure 16-15, which assigns the cost of the quality inspection cost center to the quality inspection process through the activity type based on the resource driver "number of quality inspection". The maintenance template is shown in figure 16-16.

Figure 16? 16 maintenance template

The "actual: variable quantity factor" in this template should fill in the time of job type LABO02 consumed by the business process execution, and "actual: fixed number per period" is the time of fixed consumption of activity type LABO02 in an accounting period (this time has nothing to do with the number of business process execution, that is, non-quantity-dependent fixed costs).

The template for assigning master data to the business process is shown in figure 16-17.

Figure 16-17 assigns a template for the master data of the business process

Perform the template allocation of the business process.

Path: SAP menu à Control à activity-based costing à final checkout à single function à à CPAS-template allocation

Figure 16-18 perform template allocation for business processes

In this example, the execution result of step ① is 2, that is, based on the cost driver, the number of business process execution is calculated to be 2, which is used as the resource driver of step ②. The calculation result of job type is as follows.

? Sum of fixed and variable quantities: the business process consumes the time of job type LABO02, that is, 2EA*15MIN+5MIN=35MIN.

? Total fixed + variable cost: the business process consumes the cost of the activity type, that is, the quantity consumed * activity type plan price = 35MIN*3CNY=105CNY.

* reference materials, it is said to be from some high-ranking person in SAP *

ABC cost method

The theoretical background of ABC cost method the development background of ABC cost method

In the past ten or twenty years, highly automated advanced manufacturing enterprises have emerged on the basis of the electronic technology revolution, which has brought about great changes in management concepts and management technology. just-in-time (JIT) procurement and manufacturing system, as well as its closely related zero inventory, cell manufacturing, total quality management and other new management concepts and technologies came into being. Advanced manufacturing enterprises with a high degree of automation can meet the diversified and small batch needs of customers in time, and produce multi-variety and low-batch products quickly and with high quality. In this new manufacturing environment, profound changes will take place in the traditional purchasing and manufacturing process of enterprises. Accordingly, the accounting theories and methods such as product cost measurement and control, accounting decision-making and performance evaluation, which used to serve traditional procurement and manufacturing and even enterprise decision-making, will also be changed accordingly. For example, in the advanced manufacturing environment, many workers have been replaced by machines, so the proportion of direct labor costs has greatly decreased and a large proportion of fixed manufacturing costs have increased. The indirect cost 70 years ago was only 50% / 60% of the direct labor cost, while today the indirect cost of most companies is 400% / 500% of the direct labor cost. In the past, the direct labor cost accounted for 40% / 50% of the product cost, but today it is less than 10%. It even accounts for only 35% of the product cost. With such a great change in the product cost structure, the traditional "quantity-based costing" (such as the cost allocation method based on man-hours and machine hours) can not correctly reflect the consumption of products, thus the benefits of enterprise automation can not be calculated correctly. can not provide correct and useful accounting information for enterprise decision-making and control. The ultimate consequence is a decline in the overall profit level of the enterprise.

In 1987, the research conducted by professors Rober Kaplan and Robin Cooper of Harvard Business School made ABC cost method win wide attention. ABC cost method has received extensive attention in accurate cost information, improving business process, and providing perfect information for resource decision-making, product pricing and portfolio decision-making. At present, many advanced companies in the world have implemented ABC cost method to improve the original accounting system and enhance the competitiveness of enterprises.

ABC costing (Activity-Based Costing), that is, activity-based costing, is a costing method that takes activity as the core, confirms and measures all activities that consume enterprise resources, accurately counts the cost of consumed resources into activities, and then selects cost drivers and allocates all activity-based costs to costing objects (products or services).

The guiding ideology of ABC cost method is: "cost object consumes activity, activity consumes resources". ABC cost method treats direct cost and indirect cost (including period expenses) equally as the cost of consuming activities of products (services), which broadens the scope of cost calculation and makes the calculated product (service) costs more accurate and true.

Activity is the core and basic object of costing. Product cost or service cost is the total cost of all activities and the end of the actual cost of enterprise resources.

Reasons for implementing ABC cost method and not implementing ABC cost method

In the foreign research literature on the investigation of ABC cost method, it is pointed out that among the feeders who have the knowledge of ABC cost method, the main reasons for implementing ABC cost method are: the existing cost information of ① is not accurate; ② faces relatively fierce competition environment, such as the increasing automatic production; ③ is lack of decision-making information, such as non-financial information; ④ is currently facing the problem of resource allocation.

The main reasons for not implementing the ABC cost method are: the ① ABC cost method is too complex and time-consuming; ② 's current accounting system is sufficient; the benefits of ③ adopting the ABC cost method are uncertain; ④ lacks experience; ⑤ employees are not familiar with or unwilling to use the ABC cost method; inconvenience in ③ management decisions or processes; high implementation costs of ⑦; difficulties in choosing cost drivers for ⑧ ⑨ currently lacks advanced computer technology to reduce the cost of developing ABC costing and tracking activities; the lack of human resources and excessive training costs of ⑩.

Characteristics of companies that use the ABC cost method

The use of ABC cost method is related to some factors of the company, such as the company's cost structure, current accounting system, cost diversity and competitive environment.

A, cost structure

The main reason for paying attention to ABC cost method is that it can assign manufacturing and use to products more accurately, and adopt a more widely used cost driver by increasing the cost base and based more on activities rather than product costs. One of the important reasons for the introduction of the ABC cost method is the change in the cost structure in recent years (increase in manufacturing costs, Cooper and Kaplan,1988). Based on this assumption, the companies that adopt the ABC cost method have a remarkable characteristic, that is, the relative value-added cost of manufacturing cost (direct labor plus manufacturing cost) is very high.

B. Current accounting system

The value of introducing new accounting calculation methods depends on the current accounting system. The literature on ABC cost method believes that the cost base and cost drivers used by traditional accounting methods are limited (see Cooper,1988b for details). The ABC cost method increases the cost base (activity) and cost driver. When considering the implementation of the ABC cost method, the management usually considers whether to regard the ABC cost method as an independent system or to integrate the system with the current accounting system (Cooper,1990,1991). Yvonne P.Shanaban (1997) believes that two factors should be taken into account when making the above decision, one is the effective way to change the current accounting system, and the other is the software cost of developing and integrating the current system.

C. Diversity of products

The diversity of products is one of the reasons why the traditional accounting system distorts the cost information when calculating the product cost. The diversity of products includes: the diversity of production, the diversity of scale, the diversity of raw materials and the diversity of installation (Cooper,1988a). Companies that use the ABC cost method tend to have a high degree of product diversity. It is worth mentioning that companies that do not use the ABC cost method have more customized products than those that use the ABC cost method. The reason may be that while customized products usually mean diversity of products, materials, and installations, customized products often increase the cost of developing new accounting systems, and the importance of accounting costs is usually determined by the degree of customization. D, competitive environment

Cooper and Kaplan (1991 pp372) describe the use of ABC cost method: if the current accounting system is designed under the background of high measurement cost, weak competition and low product diversity, then when the measurement cost becomes lower, the competition becomes fierce, and the product diversity increases, the implementation of ABC cost method is feasible and beneficial.

As the economic environment is becoming more and more volatile and the competition is becoming more and more fierce, compared with the ABC cost method, traditional accounting increases the cost caused by mistakes, so it is very important to improve the current accounting system.

E, the size of the company

There is a lot of data showing that the size of a company is an important feature that distinguishes companies that use ABC cost method from those that do not use ABC cost method (Ask and AX,1992;Drury and Tayles,1994;Davies and Sweeting,1993;Innes and Mitchell,1995). Because large companies have stronger communication channels, better infrastructure, and a stronger need for information, they are more interested in the ABC cost approach than smaller ones.

Expected income of ABC cost method and problems in its implementation

The possible benefits of implementing the ABC cost method are: providing more accurate product costs; providing corresponding cost information for pricing strategies; strengthening effective cost management and control; persisting in improving marketing strategies; improving product profitability; ensuring identifiable cost drivers; effective analysis of product profitability; improving cost control; and providing accurate performance indicators.

At the same time, in the process of implementing the ABC cost method, there may be some problems: the identification of the cost driver; the grasp of the accuracy of the causal relationship between the cost and the cost driver; the cost of implementing the ABC cost method; the integration with the existing accounting system; the resistance encountered in promoting the ABC cost method to the senior level; how to get the support of the low-level employees.

The satisfaction of the companies implementing the ABC cost method with the ABC cost method

Some companies around the world have begun to use the ABC cost method to improve their old accounting system, whether the ABC cost method can bring the desired results. In a research project conducted by IMA and CAM-I in 1987, Howell et al studied the company's satisfaction with product cost and performance measurement after the implementation of the ABC cost method. The results are as follows:

All ① respondents reported that the implementation of the ABC cost approach improved at least one area of the accounting management system, as well as important breakthroughs in the performance measurement system.

After the implementation of ABC cost method in ②, there is an obvious positive relationship between the company's satisfaction in product cost and the use of ABC cost method in product pricing and combination strategy. The satisfaction of the ABC cost method in cost reduction is also proportional to the degree to which the executive manager uses the ABC cost method information. This shows that managers who are more satisfied with the ABC cost method are more likely to take practical action to effectively use the ABC cost method to influence decision-making.

③ before the use of ABC cost method, interviewees had little confidence in the accuracy of traditional accounting information. Traditional accounting systems are designed for departmental and external reports, and they serve a narrow range of customers. The implementation of ABC cost method can improve the accuracy of cost information. The information provided by ABC cost method will support product resource decision-making, product pricing and portfolio strategy, which also support customer profitability analysis.

ABC cost method in ERP

ABC cost method was first put forward by the accounting theorists. It should be said that the theory itself is not complex, but because the internal process of the enterprise is ever-changing, the cost driver can not be standardized, so the practice of the theory becomes much more difficult than the theory itself. In general, computer software will be used in the implementation of ABC cost method. Using the ABC cost method module in ERP has more advantages than the general software: first of all, the integration of ERP makes the ABC cost method fully integrated into the whole system without the need to maintain a parallel management accounting system. Second, cost driver data can be automatically obtained from any other module in ERP, such as sales, procurement, production, storage and transportation, manpower, finance, and so on. The complex system interface design and tedious data upload process are avoided. Third, large-scale ERP software generally has the technical basis for dynamically dealing with large amounts of data.

Process (Process)

One of the main tasks of cost accounting is to attribute the cost flow to the cost object according to the causes of the cost. Although we can make such a clear summary of direct costs (for example, the consumption of raw materials for production orders), when we talk about indirect costs, the situation is not so simple. Generally speaking, indirect expenses will flow to the cost center first, and the cost center accounting module provides a series of ways to allocate indirect expenses to cost objects (for example, allocation, allocation, overhead rate and activity allocation). However, the attribution of indirect costs to the cost center only reflects the location of the cost, but not the cause of the cost. Therefore, in many cases, it is very difficult to assign the cost object directly from the cost center. Many experienced consultants have mentioned the process of understanding this issue: when they first came into contact with cost center accounting, they felt that there were too many and complex tools for cost allocation than you wanted. However, once these tools are actually used in the enterprise, it is found that there are not enough tools and they are not complex enough, so it is often very difficult to distribute indirect costs reasonably and fairly.

The key to solve this problem is to introduce the concept of process. Process is the core of ABC cost method. The process reflects a coherent business process within the enterprise, and the process is the cause of the indirect cost. In ERP management accounting, a process is not confined to a specific cost center, on the contrary, it is a cross-functional cost object. For example, a procurement process may span three cost centers: procurement, goods acceptance and quality inspection. The blue rectangular arrow in figure 1 represents the "process" at the heart of overhead processing.

All processes in the enterprise need to be maintained according to the standard hierarchy. Of course, in addition to the standard hierarchy, other process groups can be arbitrarily defined for reasons such as reports.

Resource motivation (Resource Driver)

Relative to the process, the cost center manages the resources of the enterprise and is the place where the cost occurs. The process consumes the resources of each cost center, so the overhead of the cost center needs to be allocated to each process. The drivers that cause the process to consume resources are called resource drivers. For example, the procurement process takes up the time of purchasing support staff. In figure 1, the resource motivation is represented by a black circle on the left side of the process. The overhead of the cost center is allocated to different processes according to resource drivers.

In fact, resource driver is a new concept, not a new technology in ERP. We can think that resource driver is a new interpretation of cost allocation technology. The cost allocation techniques we introduce in the chapter "cost Center and Internal orders" can be used to determine the amount of consumption of resource drivers. In general, we can distinguish between two types of technologies that allocate cost center resources to business processes (through resource drivers). One is pure cost-value distribution, called Push Approach, such as Assessment and Distribution in figure 1. The other is to track the allocation of quantity, which is called Pull Approach, such as direct job allocation, indirect job allocation and "actual = target job allocation" in figure 1. We have introduced these technologies in the chapter "cost Center and Internal orders", which will not be repeated in this chapter.

Technically speaking, the manifestation of resource drivers is the cost center activities consumed by each process or the statistical indicators of each process. The statistical indicators of the process can also be integrated from the logistics information system (LIS).

Cost driver (Cost Driver)

The quintessence of ABC cost method is to allocate process costs according to the unique cost drivers of each process, rather than the traditional one-size-fits-all allocation of product quantity or man-hours and machine hours. Cost driver essentially refers to the measurement method of factors that essentially cause the cost of the process. For example, the cost driver of the sales order processing process is the number of orders and the number of changes to the order. The cost driver of the production and receiving process may be the number of forklifts determined according to the raw material volume and times of the production order, and so on. In figure 1, we use the red circle on the right side of the process to represent the cost driver.

Only from the definition of cost driver, we can imagine that the definition of cost driver, calculation methods and data sources can not be standardized. Is there a consensus among enterprises in various industries on the cost drivers of various processes, and is there a best practice? At least not at present or in the short term. So the system provides one of the most flexible tools: process templates. In figure 1, using the process template, the system automatically calculates the cost driver of how much process 2 is consumed by a production order (which may be the number of forklifts using raw materials for the order, etc.).

Figure 2 explains the structure of the process template. The process template consists of four main columns: the object bar answers, "which processes are used?" Or the more general "which processes apply?" Which generally points to a process or process group The quantity column answers, "how many of these processes are used?" Refers to the number of process cost drivers consumed by current cost objects (such as production orders). The system in this column allows users to call functions, which can be freely defined by users using ERP's programming language. The activation condition bar answers "under what conditions does this process apply", which refers to whether a process is related to the current cost object, such as a production order. Custom functions are also allowed to be called. The evaluation point answers "when the process applies", such as order release or closure.

Because custom functions are allowed, the ABC cost method in ERP can obtain data from anywhere in the system to calculate the number of cost drivers, even external systems. For example, the number of work centers through which the production order passes from the process route; the material project from BOM; the material weight from the material master data; the batch from the production order; the purchase order quantity from the logistics information system, and so on.

In the implementation and maintenance of ABC cost method, attention should be paid to the reusability or universal applicability of process templates. That is, to consider a variety of possibilities to reduce the maintenance of the process template.

If the process is not consuming production overhead, but managing resources, then the process cost can be allocated to the market segment, as shown in figure 1. Allocation can be either Assessment or direct allocation by the process. Statistical indicators can be used as cost drivers when sharing.

Structured process (Structured Process)

Structured process is a new tool. It is a multi-level process group. The cost drivers of all lower processes must be available proportionally from the upper cost drivers. Therefore, the number of cost drivers of the whole structure can be reversed. The resource drivers of the lowest processes (that is, the number of cost centers / activities) can be obtained from their cost drivers. Part of the amount of resource consumption may be proportional to the process output, and the other part may be fixed, representing the resources that will always be consumed regardless of the actual implementation of the process.

Structured processes were originally designed for the service industry. It is used to describe the standard time for each task in a multitasking process.

Parallel ABC cost method (Parallel ABC)

The ABC cost method mentioned above is fully integrated into the cost flow of the enterprise. But ABC cost method is a big shock for enterprises. In a sense, there are considerable risks in implementation. Therefore, in addition to the ABC cost method in figure 1, ERP also provides a method called parallel ABC cost method.

The parallel ABC method does not produce the actual cost flow, and its results are simulated and statistical. Suitable for strategic cost analysis and high-level "if-then" (what-if) analysis. Therefore, we can first select some key processes to implement the parallel ABC cost method without affecting the actual cost flow. By comparing the data of parallel ABC method and traditional cost method, to test the benefit and feasibility of implementing ABC cost method in our enterprise, as well as as training and promotion. Finally, the fully integrated ABC cost method is used.

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