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Tool: Determining Activity-Based Costs

By Baselinemag  |  Posted 2002-09-30 Email Print this article Print
 
 
 
 
 
 

Use our interactive tool to sample activity-based costing for your technology department. This model can help you determine exactly how much it costs to set up new users with a given application.

Activity-based costing is often counterintuitive for traditional finance managers because neither God nor the devil reside in the details. Being approximately correct is better than precisely inaccurate, as the saying goes. Calculating the cost of an activity is the easy part. The real trick is knowing what activities matter and what tasks comprise them.

Tally Your Tasks
YOUR COSTS EXAMPLE
Labor hours
Time spent by each tech worker

.25
Hourly wages
Worker's fully burdened wage

37
Application costs
Prorated cost of using admin tool

$ $4
Equipment costs
Prorated cost of using admin PC

$$2
Other costs
Network usage

$$0.50
Cost per activity
This shows the total cost to set up a new user
$ $15.75
   





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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