The companies concerned with their production processes, where used depending on the cost method results in a large increase in overhead and operating expenses of the companies. In this context, there was the need for new tools to support the management process, as costing ABC (Activity Based Costing). This is a method to determine which are the resources consumed by activities within a company, reflecting the relationship of these activities with all the distribution costs in the process.

In this context companies can cut waste, improve services, review programs qualities and among other improvements in the process.

Keywords: ABC costing. Cost Absorption. Tracking.


One of the goals of accounting is offering information to managers who can help them in making decisions and that are essential for good management.

The costs should be considered as a branch of accounting that clears the values ​​for the production of goods, merchandise and services for calculation purposes the outcome and measurement of inventories and provides management information.

The costing methods are ways of calculating these cost values, where according Horngren, Foster and Dating (2000), the costing methods determine mode as will be assigned to the product cost.

There are several existing methods, but can not be said that one is better or replace the other, as they are applicable according to the characteristics of entities such as line of business, size, desired level of detail of cost values, management objectives etc. The methods developed in accordance with the market demands, as the whole mechanism of administrative support, are dynamic structures and therefore in constant evolution, where the method of Funding Based on Activity (ABC) has emerged as a way to meet this new need for cost information.

Cost ABC Concept

The relevant information has been evidenced and costing methods evolved to better meet the needs of managers. The ABC method appears as a more strategic view, incorporating new management concepts before ignored by the other methods.

The Activity Based Costing and Activity Based Costing (ABC) is a costing method that accurately assesses the activities developed in a company (both industrial, service or commercial), using drivers to allocate indirect expenses and costs in a more realistic way to products and services. The ABC specifies that it is not the product or service that consumes resources, and Yes, resources are consumed by the activities and these, in turn, are consumed by products or services, where the center of interest of the ABC focuses on the indirect expenses.

The purpose of ABC is to create information for decisions to improve the competitiveness of enterprises. The activities can be defined as a process that combines people, technologies, materials, methods and its environment, whose function is the production of goods and services, describing the way how the company uses its time and resources to fulfill its mission, goals and goals (NAKAGAWA, 1994).

According Brimson (1996) reports that the activities are, and not tasks, functions or operations that were chosen as the basis of cost accounting, they represent the appropriate level of detail to support a system accounting. The functions represent an analysis of a high level both, tasks would encompass a very large level of detail for control purposes, so these information would undermine the cost-benefit of cost system.

Thus, the main focus of accounting by activities, is based the principle that the activities consume resources as products, customers or other cost objectives consuming activities. The cost is carried out by tracking of the indirect costs of manufacturing a product or service by direct identification with relatable activities and the determination of as each activity is dedicated to the goal of cost. This cost structure, call activity list, describes the pattern of consumption of the activity.

The main difference of the ABC method with the other methods, is in the form of how to allocate indirect costs to products. This setting results in a different technique for calculating the costs of a given object, which may be: products, product lines, services, customers, customer segments, channels distribution or any other object of interest management.

The ABC method has cost characteristics by absorption where you use apportionments, but this would only occur as a last resort. In this search method track expenses of a company to analyze and monitor the various consumer Route resources “directly identifiable” with its activities, and for the products and services, would not be recommended to achieve the apportionment of expenses that are not directly identifiable to a particular activity, these expenditures should be launched in income, in order not to distort the cost information.

As reported by Nakagawa (1994), the tracking of the ABC method identifies, classifies and measures in this first phase, as the activities consume resources, and in a second phase, the products consume the activities of a company. The information generated identifies the actions needed for survival and company competition resulting in success, namely, if achieve actually there are significant and permanent changes in attitudes of human resources.

In this sense it is used in the apportionment ABC, all his managerial spirit to allocate costs to the cost object that gave him cause or origin, is lost and information may be distorted, why, spending untraceable should be allocated to the result.

According to the advantages and benefits of the company ABC should view as an investment and design an appropriate strategy implementation allocating all the resources necessary for their success.


The purpose of ABC is to create information for decision-making, aiming improve the competitiveness of companies and the planning of long actions term. With its power to track and tick the “causes” that lead to the appearance indirect costs, eliminates the arbitrary apportionment.

By ABC features a new method of funding is not provided, and yes, the absorption with some innovations. The ABC takes care of two specific aspects absorption method, the method used to identify the overhead to products and the expansion of the scope of what was considered indirect.

Everyone should be aware that the costing methods alone does not bring benefit to companies. They need to be combined with management tools that really can improve their production processes in seeking a competitive advantage.


BRIMSON, James A. Contabilidades por Atividades. São Paulo: Atlas, 1996.

HORNGREN, Charles T.; FOSTER, George; DATAR, Srikant M. Contabilidade de custos. 9a. ed.Rio de Janeiro, LTC Editora, 2000.

NAKAGAWA, Masayuki. Custeio Baseado em Atividades. São Paulo: Atlas, 1994.

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