Activity Based Costing for Excel (by ModelSheet) calculates cost budgets from forecast levels of activities that generate expenditure with detailed analysis of costs broken into individual cost centers. Activity Based Costing is suitable for determining profitability and economic cash flow of business streams for management decision making such as capital investment and risk management.
Activity Based Costing for Excel generates expense budgets based on the expected levels of activities that drive expenditure items. For example, the cost of order processing may be driven by the number of orders, order line items, and seasonal factors. The Excel template can manage many cost centers with hundreds of expense items. Furthermore, each cost item can be driven by multiple activities and the calculated budget time range can be created in days, weeks, months, quarters, or years.
Key features of Activity Based Costing for Excel include:
Specify details of cost centers and corresponding expense items.
Define measurable activities that drive expenses.
Map activities that drive each expense item.
Divide costs into a variable portion (driven by activity counts) and a fixed portion.
Input historical data for expense and activity counts to compute historical comparison benchmarks for expense/activity ratios.
Enter coefficients that quantify the expense impact of each activity on each expense account. These can be specified independently of the historical expense/activity ratios which are provided as guidelines and points of comparison.
Input expected activity counts for the budget time range to compute expected activity based cost budgets.
Creates budgets for all cost centers down to the level of expense items.
The budget can be broken out by month (or other time period) or presented as a total for the budget time range.
Generates analysis showing which activities drive which expense accounts, the expense/activity ratios used in the budget (with historical values) and the amount of expense generated by each activity in each expense item.