Lead Software News

Time-Driven ABC is a new methodology that in certain situations can be used to simplify the process of building and maintaining ABC models and recognize the effects of capacity on ABC costs.

Activity Analyzer has been adapted to support Time-Driven ABC for environments where transaction-level integration is not practical. Our approach provides the main benefits of using activity time unit estimates instead of employee interviews and time logs to assign resource costs to activities. At run time when activity costs are calculated excess capacity costs can either be included or excluded.

Activities are assigned to cost objects in the usual way except that it's possible to calculate driver quantities based on consumption rates and the quantity produced. This eliminates the time consuming process of collecting activity driver quantities for cost objects.