22. TRANSPORTATION COST DRIVER
Product
- Type, Value, Weight, Size, Shelf life, Damage rate
Mode of Transportation & Vehicle Type
- Truck, Railways, Waterways, Airways, Pipeline
Equipment installed or provided
- Dump, Crane, Container
Route & Distance
Trip Time
- Loading + Traveling + Unloading + Waiting Time
Utilization
- 1 way or 2 ways
- Maintenance, Accident
Seasonality (Demand & Supply) 22
Service provided
- Unloading service
23. ACTIVITY-BASED COSTING
More accurate Costing Methodology than
Traditional Costing
Focus on “Indirect” Expenses & make “Direct”
Trace actual expenses rather than allocate each
expense category to the particular Cost Objects
Cost Objects consume Activities
Activities consume Resources
The Consumption of Resources drives Cost
Understanding Relationship is critical in
successfully managing cost 23