A Study Concerning the Application of the Activity-Based Costing Method for Entities Operating in the Building Sector

Abstract

Cost calculation plays an important part in the decision-making process of management of the economic entities. The aim of this article is to highlight the advantages and disadvantages of the Activity-Based Costing (ABC) calculation method when calculating the unit cost of the works done in the case of construction companies, by using the following research methods: observation, economic analysis, case study and descriptive. The results show that the application of the ABC method for the building sector leads to a more refined cost calculation which provides the management with more detailed information.

Keywords

• process cost
• cost inductor
• direct cost
• indirect cost
• production cost