The Cost Calculation Method Based on Activity Is Known as The Activity-Based Costing (ABC) Method

Burhan Reshat Rexhepi; Ilir Musli Murtezaj; Besa Seadin  Xhaferi; Naser Raimi; Halit Xhafa; Seadin Xhaferi

doi:10.61707/r9xmrs04

Authors

Burhan Reshat Rexhepi UBT –Higher Education Institution; MBE Management Bussines and Economy, Kalabria 1000, Pristina, Kosovo
Ilir Musli Murtezaj AAB College Faculty of Economics; Elez Berisha, No. 56 Zona Industriale field Kosovo, 10000 Pristina Republic of Kosovo
Besa Seadin Xhaferi Department of Faculty of Economics University of Tetova Ilinden street no.1200 Tetovo, Republic of North Macedonia
Naser Raimi Department of Faculty of Economics University of Tetova Ilinden street no.1200 Tetovo, Republic of North Macedonia
Halit Xhafa Qiriaz University College, Department of Faculty of Economics, Rruga Taulantet, Kodër-Kamëz, Tirana 1029.Albania
Seadin Xhaferi Department of Faculty of Economics University of Tetova Ilinden street no.1200 Tetovo, Republic of North Macedonia

DOI:

https://doi.org/10.61707/r9xmrs04

Keywords:

Costing 1, Marketing 2, Menagers 3, Managerial Accounting 4, Costs Abc Methods 5

Abstract

This paper provides a detailed explanation of the activity-based costing method, which is a precise approach for determining and allocating costs in final products. Firms typically do not implement the activity-based costing method due to the need for specialised training and increased fees. Consequently, many companies opt not to utilise this method for product costing. The study addressed the challenges encountered during the implementation of the activity-based costing method. The study also outlines the necessary steps for a fair implementation and highlights the advantages of this method over the traditional method of product costing. Furthermore, it explores how the enterprise's expansion reveals the absorption of certain costs not allocated to products.