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Activity-based Costing



Kingdee K/3 Activity-based Costing is intended for make-to-order industrial enterprises, to achieve the activity-based cost management. The module directly regards SOs and MOs as cost objects, which compasses much more than the traditional department-based costing and introduces the cost center concept to track production activities throughout the entire manufacturing process. It provides multi-dimensional cost statistics and analysis based on SOs, MOs, cost centers, operations, cost objects, and cost items, to help enterprises optimize the product structure, continue to improve cost management, and win cost advantages. It often works with Inventory Management, Inventory Accounting, MO Management, SFC, and General Ledger, to provide more complete data integration and analysis solution.

Business Workflow





1.Cost center

The module provides master data setting for activity-based costing, introduces the cost center concept, and establish links among work center, operation, and department, to help enterprises set up a basic accounting platform for activity-based costing and establish a solid foundation to improve the cost management.

2.Cost data collection

The module can collect product outputs and expenses. Input/Output data directly comes from relevant module; WIP data directly comes from production reports; material expenses directly come from the Picking List; other expenses are collected based on MOs or cost centers. A series of collection and setting functions help enterprises reduce labor-intensive data entry, ensure timely and accurate data collection.

3.Cost expense allocation

The module can allocate production costs, such as joint consumption materials costs and WIP costs. It allows you to define and set cost allocation standards for cost objects, cost centers, and operations, and automatically combines with standard data to allocate various expenses to MOs, cost centers, operations, and work centers, to assist enterprises with multi-dimensional refined costing by order, and activity-based cost management.

4.Cost calculation

The module provides validity check of cost calculation and a cost calculation wizard. It automatically checks the entire cost calculation process, analyzes each problem intelligently and gives users the best solution, to help enterprises perform product cost calculation, thus greatly reducing the vulnerability to errors and improving the accounting efficiency and accuracy.

5.Order cost tracking

The module regards SOs and MOs as actual cost objects, and attaches the results of expense collection, expenses allocation, and cost calculation to MOs. It also provides users with cost center and activity-based cost information for MOs, as well as analysis reports, to help enterprises analyze manufacturing order costs, and adjust manufacturing processes and sales policies in time.

6.Scrap loss handling  

The module deals with scrap losses in an all-around way. It can distinguish repairable and unrepairable scraps, independently collect and allocate repair expenses, automatically calculate scrap losses, support quality cost analysis, and deduct corresponding cost items when entering claim data for scrap to define the quality assurance responsibility clearly.

7.Voucher handling

The module provides accounting voucher templates for you to generate vouchers. It can automatically use relevant templates to generate vouchers according to the results of expense collection and cost calculation, and then transmit them to General Ledger, thus helping enterprises improve the accounting efficiency and providing them with a integrated solution.