Activity Based Costing Model

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Cost Model for Data Management Center (DMC)

Main Menu

IntroductionThis workbook was developed to assist the Data Management Center (DMC) in gaining better insightsIn order to better understand costs, the following steps were taken to develop this spreadsheet model:

1. Identify all of the resources available to DMC and the associated costs of the resources (personnel,

2. Identify all of the major activities of DMC such as setting up IP addresses, installing network equipm3. Map a relationship between the resources and activities - referred to as "Resource Drivers" (allocate4. Map a relationship between the activities and cost objects - referred to as "Activity Drivers" (allocates5. Determine the costs of each service, product or what-ever you consider your cost object within the mSince cost data, activities, and other attributes change, this model should be reviewed and updated at l

Data Entry Cell >

Tab Description

1 Main Menu Starting point for using this cost model2 Overview Some background information on how this m3 Resource Pools (Step 1) Identify resource pools and their related costs4 Activity Costing (Step 2) Identify and describe the key activities perfor5 Activity Drivers (Step 3) Based on analysis, determine the output metri6 Cost Objects (Step 4) Identify and describe the cost objects that DM7 Final Report (Step 5) Report of costs by cost objects8 Glossary Glossary of terms used related to this cost m

Purpose


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ehind the cost of operations.

quipment, etc.)

nt, etc.costs to key activities)activity cost to your services)odel.

ast once a year.

del worksas a starting point for the modeled by the Data Management Center

ics for allocating the costsC wants to use

del

Activity Drivers

Cost Objects

Final Report

Glossary

Main Menu

Overview

Resource Pools

Activity Costing


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Overview of Model

PurposeThe purpose of this model is to allocate costs. This model is based on the principle that activities incurconsumption of resources. As end users demand products or services, activities must be performed.

How are Costs Allocated?The model uses a two step process to allocate costs:

Step 1: You have to pull actual costs (what was spent) per the most reliable source, such as the Gener

have identified the actual costs, then you have to determine how to allocate all of these costs (resourceare performed by the department (or what-ever domain you are building the model to). Labor costs arelooking at the percentage of time people spend on various activities.

Step 2: Once you understand the costs by activities, then you need to allocate these costs to your cost

different service lines you perform for customers). For example, the number of help desk tickets proces

driver to allocate costs from the help desk activity to help desk support costs.

How do I use the Model?The model can help a department understand the following:

What is the true costs of the services we are providing to our customers?

How much should we charge customers for the cost of our services?

What are low and high priority activities in terms of funding

How do I use the information in this Model?You want to key-in on what your Activity Costs are and also look at those activities that may not be linke

customers. For example, if you have significant costs for non-value added activities (not close to the cuyou might want to pursue more lean approaches to incurring these costs. For example, if you are force

your costs, then you would not want to cut activities very close to the customer. Also, you can express y

costs in terms of Unit Costs. This is a common benchmark for reducing your costs over time.

How do I update / maintain the Model?The following inputs to this model may require updating:

1 Actual Costs for ResourcesBased on invoices, General Ledger Reports and other sources, the actual costs as of a cut-change. For example, newly awarded contracts, expansion of staffing resources, and installequipment will change the current costs captured for resources on tab 3 of this model.

2 Activities PerformedBased on changes in what a department does, the activities on tab 4 may change. For exa

department discontinues a key service or starts providing a new service, then this model willupdating.

3 Allocation of Resources (Resource Drivers)If resources change or activities change, then you will need to update the resource drivers iallocating the costs between the resources and the activities. Additionally, it is a good idea t


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current allocations used since people may shift in how much time they spend on an activity.

4 New Activities Require New Drivers and Cost Objects

In the event a department begins offering a new service to a customer, this will require re-bmodel to include new resource costs, drivers, activities, and cost objects.

What are some rules to follow in building the Model?

1 Link to General Ledger - Where practical, try to obtain and balance your cost data directly wi

Ledger since this is the official system of record for costs.

2 Prioritize the Activities - If the number of activities is greater than ten, you may want to focus

in order to keep the model simple and manageable.

3 Group Non Traceable Activities - Some activities are difficult to trace back to specific resour

group all of these activities together and allocate using a single driver such as direct labor c


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osts through the

al Ledger. Once you

) to the activities thatypically allocated by

objects (such as the

sed is an output

d to

tomer), thento reduce

our

off period will most likelytion of new

ple, if a

require

volved invalidate the

Overview Activity Costing Cost Objects Glossary

Main Menu Resource Pools Activity Drivers Final Report


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ilding the

ith the General

on the vital few activities

ce pools. May want to

st.


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Resource Pools

PurposeThe purpose of this worksheet is to identify and capture all of the resources and their associated costarting point in allocating costs to activities. This is the baseline for developing the rest of the model

InstructionsA recommended practice is to determine the total costs of running the department for one full mont

resource pools that are linked to specific services or activities. You may have to start by listing all ofdepartment and then group them together based on what they do.

Step 1 - Capture the total overall costs for each resource pool

Actual

Resource Pool Costs 3.1 100,0003.2 125,0003.3 68,500

3.4 225,0003.5 78,1003.6 57,1003.73.83.9

3.10Total Cost Accounted For in this Model 653,700 85%Total Cost Incurred for Baseline Period 770,000 100%Cost Not Accounted For in this Model -116,300 15%

Step 2 - If possible, try to breakdown the Actual Costs per above into components s

equipment, and indirect cost since each of these components might have to get allNOTE: The template below is setup for three components - feel free to modify as needed for a good

Actual Direct Labor Costs

Resource Pool Costs 3.n.13.1 100,000 100,000

3.2 125,000 100,000

3.3 68,500 68,500

3.4 225,000 190,000

3.5 78,100 0

3.6 57,100 0

3.7 0 03.8 0 0

3.9 0 0

3.10 0 0

Network Engineers Detail Cost Schedule aDatabase AdministratorsOperational Management

Analysis with SubjectExternal / Indirect Costs

Hardware and Equipment

Detail Cost Schedule aDetail Cost Schedule a

Vendor Invoices and GInventory Control Reco

Network Engineers

0

External / Indirect Costs

000

Service Support / Help DeskHardware and Equipment

Database AdministratorsOperational ManagementService Support / Help Desk


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ts. This represents an important.

and break out this costs into

the personnel assigned to the

Time

Frame

Jul-07Jul-07Jul-07

Jul-07Jul-07Jul-07

uch as labor,

cated differentlycost allocation.

Equipment Indirect Costs Out of Balance

3.n.2 3.n.3 Amount0 0 00 25,000 00 0 00 35,000 0

70,100 8,000 0

50,100 7,000 0

0 0 00 0 00 0 00 0 0

0

Overview Activity Costing Cost Objec

Main Menu Resource Pools Activity Dri

nd General Ledger Reports

atter Experts

nd General Ledger Reportsnd General Ledger Reports

eneral Ledger Reportsrds and General Ledger Reports


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Final Report

Glossaryts

ers


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Activity Costing

PurposeThe purpose of this worksheet is to allocate your resource pool costs (tab 3) to a list of critical activities

InstructionsThere are two important steps to completing this worksheet:

1 Identify and describe the various activities performed by the resources in the Department. SDepartment should have a good overall understanding of department activities; such as SetBudget Requests, and Installing New Network Connections.

2 In order to allocate resource pool costs to activities, you will need to determine how personnpersonal interviews are often used to ascertain the proportion of time people spend on vario

Step 1 - List Key ActivitiesBriefly describe the key activities performed by the Department. Try to keep this list to the main activitieAt the same time, the list should be complete enough to account for most of the resource costs spent e

4.14.24.34.54.64.74.84.9

4.10

Step 2 - For each activity, allocate the resource pool costs across to each activity

3.13.1.1 100,000 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.1.2 0 Allocation Allocation3.1.3 0 Percent Amount Activity NameAllocate 3.1.1 > 25% 25,000Allocate 3.1.2 > 0% 0Allocate 3.1.3 > 0% 0

Sub Totals 25,000

The following should balance out to fully allocate your resource costs across all activities:

Total Amount Allocated 3.1.1 100,000 Total PercTotal Amount Allocated 3.1.2 0 Total PercTotal Amount Allocated 3.1.3 0 Total Perc

3.23.2.1 100,000 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.2.2 0 Allocation Allocation3.2.3 25,000 Percent Amount Activity NameAllocate 3.2.1 > 0% 0

Installation of Network Connections and EquipmentTrouble Shoot Network Connection ProblemsDatabase Optimization and MaintenanceData Migration and IntegrationEnd User Reports and ProgramsStrategic and Resource Management of Data

Network Engineers

Installation of Network ConnectionInstallation of Network ConnectionInstallation of Network Connection

Database Administrators

Installation of Network Connection


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Allocate 3.2.2 > 0% 0Allocate 3.2.3 > 0% 0

Sub Totals 0


Total Amount Allocated 3.2.1 100,000 Total PercTotal Amount Allocated 3.2.2 0 Total Perc

Total Amount Allocated 3.2.3 25,000 Total Perc

3.33.3.1 68,500 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.3.2 0 Allocation Allocation3.3.3 0 Percent Amount Activity NameAllocate 3.3.1 > 10% 6,850Allocate 3.3.2 > 0% 0

Allocate 3.3.3 > 0% 0Sub Totals 6,850



Total Amount Allocated 3.3.2 0 Total PercTotal Amount Allocated 3.3.3 0 Total Perc

3.43.4.1 190,000 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.4.2 0 Allocation Allocation

3.4.3 35,000 Percent Amount Activity NameAllocate 3.4.1 > 20% 38,000Allocate 3.4.2 > 0% 0Allocate 3.4.3 > 5% 1,750

Sub Totals 39,750



Total Amount Allocated 3.4.2 0 Total PercTotal Amount Allocated 3.4.3 35,000 Total Perc

3.5

3.5.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.5.2 70,100 Allocation Allocation3.5.3 8,000 Percent Amount Activity NameAllocate 3.5.1 > 0% 0Allocate 3.5.2 > 70% 49,070Allocate 3.5.3 > 70% 5,600

Sub Totals 54,670


Total Amount Allocated 3.5.1 0 Total PercTotal Amount Allocated 3.5.2 70,100 Total PercTotal Amount Allocated 3.5.3 8,000 Total Perc

3.63.6.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.6.2 50,100 Allocation Allocation3.6.3 7,000 Percent Amount Activity NameAllocate 3.6.1 > 0% 0

Installation of Network ConnectionInstallation of Network Connection

Operational Management



Service Support / Help Desk


Hardware and Equipment


External / Indirect Costs



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Allocate 3.6.2 > 40% 20,040Allocate 3.6.3 > 40% 2,800

Sub Totals 22,840


Total Amount Allocated 3.6.1 0 Total PercTotal Amount Allocated 3.6.2 50,100 Total Perc


3.73.7.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.7.2 0 Allocation Allocation3.7.3 0 Percent Amount Activity NameAllocate 3.7.1 > 0% 0Allocate 3.7.2 > 0% 0

Allocate 3.7.3 > 0% 0Sub Totals 0


Total Amount Allocated 3.7.1 0 Total Perc


3.83.8.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.8.2 0 Allocation Allocation

3.8.3 0 Percent Amount Activity NameAllocate 3.8.1 > 0% 0Allocate 3.8.2 > 0% 0Allocate 3.8.3 > 0% 0

Sub Totals 0




3.9

3.9.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.9.2 0 Allocation Allocation3.9.3 0 Percent Amount Activity NameAllocate 3.9.1 > 0% 0Allocate 3.9.2 > 0% 0Allocate 3.9.3 > 0% 0

Sub Totals 0


Total Amount Allocated 3.9.1 0 Total PercTotal Amount Allocated 3.9.2 0 Total PercTotal Amount Allocated 3.9.3 0 Total Perc

3.103.10.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - -3.10.2 0 Allocation Allocation3.10.3 0 Percent Amount Activity Name

Allocate 3.10.1 > 0% 0


0



0


0


0



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Allocate 3.10.2 > 0% 0Allocate 3.10.3 > 0% 0

Sub Totals 0




Step 3 - Summarize Activity Costs

4.14.24.34.4

4.54.64.74.8

4.94.10

TOTAL ALLOCATED COSTS

TOTAL COSTS PER TAB 3

OUT OF BALANCE AMOUNT


149,110


0

Trouble Shoot Network Connection ProblemsDatabase Optimization and Maintenance

End User Reports and ProgramsStrategic and Resource Management of Data

Installation of Network Connections and Equipment206,315148,940

74,89040,725

653,700

653,700

0

Data Migration and Integration 33,720

00

00

00

0


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performed by the Department.

bject Matter Experts within theing Up IP Addresses, Processing

el spend their time. Surveys andus activities.

that are somehow linked to customers.ch month by the Department.

- - - - - - - - - - > < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.2 - - - - - - - - - - - - - - - >Allocation Allocation

Percent Amount Activity Name35% 35,000

0% 00% 0

Sub Totals 35,000

nt Allocated 3.1.1 100% < Should add up to 100% if you are allocating any costsnt Allocated 3.1.2 0% < Should add up to 100% if you are allocating any costsnt Allocated 3.1.3 0% < Should add up to 100% if you are allocating any costs


Percent Amount Activity Name0% 0

Overview Activity Costing Cost Objec

Main Menu Resource Pools Activity Dri

s and Equipments and Equipments and Equipment

Trouble Shoot Network Connection ProblemsTrouble Shoot Network Connection ProblemsTrouble Shoot Network Connection Problems

s and Equipment Trouble Shoot Network Connection Problems


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0% 00% 0

Sub Totals 0

nt Allocated 3.2.1 100% < Should add up to 100% if you are allocating any costsnt Allocated 3.2.2 0% < Should add up to 100% if you are allocating any costs

nt Allocated 3.2.3 100% < Should add up to 100% if you are allocating any costs



0% 0

0% 0Sub Totals 13,700





0% 070% 24,500

Sub Totals 148,000




Percent Amount Activity Name0% 05% 3,5055% 400

Sub Totals 3,905




s and Equipment Trouble Shoot Network Connection Problemss and Equipment Trouble Shoot Network Connection Problems



s and Equipment Trouble Shoot Network Connection Problemss and Equipment Trouble Shoot Network Connection Problemss and Equipment Trouble Shoot Network Connection Problems




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10% 5,01010% 700

Sub Totals 5,710




Percent Amount Activity Name0% 00% 0

0% 0Sub Totals 0




Percent Amount Activity Name0% 00% 00% 0

Sub Totals 0





Sub Totals 0











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0% 00% 0

Sub Totals 0



Place into

Single Cell

4.1 149,1104.2 206,3154.3 148,9404.4 33,720

4.5 74,8904.6 40,7254.7 04.8 0

4.9 04.10 0

653,700



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< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.3 - - - - - - - - - - - - - - - > < - - - - - - - -Allocation Allocation Allocation

Percent Amount Activity Name Percent5% 5,000 10%0% 0 0%0% 0 0%

Sub Totals 5,000 Sub Totals


Percent Amount Activity Name Percent85% 85,000 10%

ts Glossary

ers Final Report

Database Optimization and MaintenanceDatabase Optimization and MaintenanceDatabase Optimization and Maintenance

Database Optimization and Maintenance


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0% 0 0%85% 21,250 5%



Percent Amount Activity Name Percent10% 6,850 0%

0% 0 0%

0% 0 0%Sub Totals 6,850 Sub Totals


Percent Amount Activity Name Percent2% 3,800 0%0% 0 0%0% 0 0%



Percent Amount Activity Name Percent0% 0 0%

20% 14,020 5%20% 1,600 5%




Database Optimization and MaintenanceDatabase Optimization and Maintenance







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20% 10,020 15%20% 1,400 15%



Percent Amount Activity Name Percent0% 0 0%0% 0 0%

0% 0 0%Sub Totals 0 Sub Totals


Percent Amount Activity Name Percent0% 0 0%0% 0 0%0% 0 0%

Sub Totals 0 Sub Totals













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0% 0 0%0% 0 0%




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- - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > < - - - - - - - - - - - - - - - Allocation of CosAllocation Allocation AllocationAmount Activity Name Percent Amount

10,000 20% 20,0000 0% 00 0% 0

10,000 Sub Totals 20,000


10,000 5% 5,000

Data Migration and IntegrationData Migration and IntegrationData Migration and Integration

End UserEnd UserEnd User

Data Migration and Integration End User


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0 0% 01,250 5% 1,250

11,250 Sub Totals 6,250


0 15% 10,2750 0% 0

0 0% 00 Sub Totals 10,275

- - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > < - - - - - - - - - - - - - - - Allocation of CosAllocation Allocation Allocation

Amount Activity Name Percent Amount0 12% 22,8000 0% 00 20% 7,0000 Sub Totals 29,800


0 0% 03,505 0% 0

400 0% 03,905 Sub Totals 0


0 0% 0

Data Migration and Integration End UserData Migration and Integration End User



Data Migration and Integration End UserData Migration and Integration End UserData Migration and Integration End User




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7,515 15% 7,5151,050 15% 1,0508,565 Sub Totals 8,565


0 0% 00 0% 0

0 0% 00 Sub Totals 0

- - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > < - - - - - - - - - - - - - - - Allocation of CosAllocation Allocation Allocation

Amount Activity Name Percent Amount0 0% 00 0% 00 0% 00 Sub Totals 0


0 0% 00 0% 00 0% 00 Sub Totals 0


0 0% 0








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0 0% 00 0% 00 Sub Totals 0

End UserData Migration and Integration End UserData Migration and Integration


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ts to Activity 4.5 - - - - - - - - - - - - - - - > < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.6 - - - - -Allocation Allocation

Activity Name Percent Amount Activity Name5% 5,0000% 00% 0

Sub Totals 5,000


Activity Name Percent Amount Activity Name0% 0

eports and Programseports and Programseports and Programs

Strategic and Resource ManagemStrategic and Resource ManagemStrategic and Resource Managem

eports and Programs Strategic and Resource Managem


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0% 05% 1,250

Sub Totals 1,250


Activity Name Percent Amount Activity Name45% 30,8250% 0

0% 0Sub Totals 30,825


Activity Name Percent Amount Activity Name1% 1,9000% 05% 1,750

Sub Totals 3,650


Activity Name Percent Amount Activity Name0% 00% 00% 0

Sub Totals 0



eports and Programs Strategic and Resource Managemeports and Programs Strategic and Resource Managem



eports and Programs Strategic and Resource Managemeports and Programs Strategic and Resource Managemeports and Programs Strategic and Resource Managem




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0% 00% 0

Sub Totals 0


Activity Name Percent Amount Activity Name0% 00% 0

0% 0Sub Totals 0



Sub Totals 0



Sub Totals 0










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0% 00% 0

Sub Totals 0

Strategic and Resource Managemeports and Programseports and Programs

Strategic and Resource Managem


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Sub Totals 0



ent of Dataent of Dataent of Data

000

ent of Data 0


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0% 00% 0

Sub Totals 0



0% 0Sub Totals 0



Sub Totals 0



Sub Totals 0



ent of Data 0ent of Data 0


ent of Data 0

ent of Data 0ent of Data 0ent of Data 0


ent of Data 0


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0% 00% 0

Sub Totals 0



0% 0Sub Totals 0



Sub Totals 0



Sub Totals 0





ent of Data 0



ent of Data 0


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0% 00% 0

Sub Totals 0

ent of Data00

ent of Data


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< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.8 - - - - - - - - - - - - - - - > < - - - - - - -Allocation Allocation Allocation





000

0


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0% 0 0%0% 0 0%













00

00

0

000

000

0


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0% 0 0%0% 0 0%













00

00

0

000

000

0


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0% 0 0%0% 0 0%

Sub Totals 0 Sub Totals00


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- - - - - - - - Allocation of Costs to Activity 4.9 - - - - - - - - - - - - - - - > < - - - - - - - - - - - - - - - Allocation of CAllocation Allocation AllocationAmount Activity Name Percent Amount

0 0% 00 0% 00 0% 00 Sub Totals 0


0 0% 0

000

0


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0 0% 00 0% 00 Sub Totals 0


0 0% 00 0% 0


- - - - - - - - Allocation of Costs to Activity 4.9 - - - - - - - - - - - - - - - > < - - - - - - - - - - - - - - - Allocation of CAllocation Allocation Allocation



0 0% 00 0% 00 0% 00 Sub Totals 0


0 0% 0

00

00

0

000

000

0


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0 0% 00 0% 00 Sub Totals 0


0 0% 00 0% 0


- - - - - - - - Allocation of Costs to Activity 4.9 - - - - - - - - - - - - - - - > < - - - - - - - - - - - - - - - Allocation of CAllocation Allocation Allocation



0 0% 00 0% 00 0% 00 Sub Totals 0


0 0% 0

00

00

0

000

000

0


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0 0% 00 0% 00 Sub Totals 0

00


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sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

000

0


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sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

00

00

0

000

000

0


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sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

sts to Activity 4.10 - - - - - - - - - - - - - - - >

Activity Name

00

00

0

000

000

0


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00


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Activity Drivers

PurposeThe purpose of this worksheet is to identify and capture a driver that can be used to allocate the Acticost objects that the department wants to use for control over costs. These activity drivers will also hwhich will be used to help benchmark costs over future periods. If the Cost Object is the same as yodo not need to complete Tab 6 - Cost Objects.

Step 1 - Identify the output metric that can used to drive and allocate activity costs

Activities per Tab 4 Output Metric (Activity D

4.14.24.34.44.54.64.7

4.84.9

4.10

Step 2 - Where applicable and measurable, convert your costs into hourly rates base

Total Hours Total

Activity Volume per Unit Hours5.1 5 35 175

5.2 135 2 2705.35.45.5 2 30 605.65.75.85.9

5.10

Database Optimization and MaintenanceData Migration and IntegrationEnd User Reports and ProgramsStrategic and Resource Management of Data

0

Number of InstallationsNumber of Help Desk TicketsNumber of Database Work OrderNumber of Data Transfer ProjectsNumber of User Development ReNumber of Unique Data Repositor

Installation of Network Connections and EquipmentTrouble Shoot Network Connection Problems

000

Installation of Network Connections and Equipment

Trouble Shoot Network Connection ProblemsUNABLE TO MEASUREUNABLE TO MEASURE

End User Reports and ProgramsUNABLE TO MEASURE


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ity Costs per Tab 4 tolp calculate unit costr activities, then you

Total Unit Total

iver) Units Cost Cost

5 29,822 149,110135 1,528 206,315

6 24,823 148,9402 16,860 33,7202 37,445 74,8904 10,181 40,725

#VALUE! 0

#VALUE! 0#VALUE! 0#VALUE! 0

Total 653,700

d on time involved.

Cost per Cost per

Above Hours

29,822 170.41$

1,528 5.66$

37,445 624.08$

Main Menu Resource Pools

Overview Activity Costing

uestsies


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Cost Objects Glossary

Activity Drivers Final Report


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Cost Objects

PurposeThe purpose of this worksheet is to describe each of the cost objects that the department wants to usmanaging costs. Cost objects may differ from your activities since they can represent anything for whiwant to measure costs. If your activities represent your cost objects, then you do not have to complete

Step 1 - Identify Cost Objects for Each Activity and if different, then allocate the

activity costs and identify the driver used for measuring the Cost Object

Activity % of Time

Ref Activity / Cost Object Cost Spent On

4.1 149,1106.4.1.1 New Network Taps 15%6.4.1.2 Setup Local Area Networks - Remote Sites 85%6.4.1.36.4.1.46.4.1.5

Totals 100%

Activity % of Time

Cost Spent On

4.2 206,3156.4.2.1 ACTIVITIES USED FOR COST OBJECTS 6.4.2.2 REFER BACK TO STEP 3 / TAB 4 6.4.2.36.4.2.46.4.2.5

Totals 0%

Activity % of Time

Cost Spent On

4.3 148,9406.4.3.1 Routine Scheduled Maintenance 65%6.4.3.2 Unscheduled Fixes and Bugs 35%6.4.3.36.4.3.46.4.3.5

Totals 100%

Activity % of TimeCost Spent On

4.4 33,7206.4.4.1 Design & Develop Interfaces 40%6.4.4.2 Data Extract / Transform / Loads (ETL) 60%6.4.4.36.4.4.46.4.4.5

Totals 100%

Installation of Network Connections and Equipment

Trouble Shoot Network Connection Problems


Data Migration and Integration


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Activity % of Time

Cost Spent On

4.5 74,8906.4.5.1 One Time Ad Hoc Requests 70%6.4.5.2 New Functional Procedure 30%

6.4.5.36.4.5.46.4.5.5

Totals 100%

Activity % of Time

Cost Spent On

4.6 40,725

6.4.6.1 ACTIVITIES USED FOR COST OBJECTS 6.4.6.2 REFER BACK TO STEP 3 / TAB 4 6.4.6.36.4.6.4

6.4.6.5 Totals 0%

Activity % of Time

Cost Spent On

4.7 0

6.4.7.1

6.4.7.2

6.4.7.36.4.7.46.4.7.5

Totals 0%

Activity % of TimeCost Spent On

4.8 06.4.8.1

6.4.8.2

6.4.8.36.4.8.46.4.8.5

Totals 0%

Activity % of Time

Cost Spent On

4.9 06.4.9.1

6.4.9.2

6.4.9.36.4.9.46.4.9.5

Totals 0%

Activity % of Time

End User Reports and Programs

Strategic and Resource Management of Data

0

0

0


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Cost Spent On

4.10 06.4.10.1

6.4.10.2

6.4.10.36.4.10.4

6.4.10.5Totals 0%

Here is a quick double check to make sure you didn't miss anything:

Total Activity Cost per this Worksheet 653,700

Total Activity Cost per Tab 4 653,700

Difference 0

0


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forh youthis worksheet.

Allocated Total UnitCost Units Cost Ref

22,367 18 1,242.58$ 6.4.1.1126,744 12 10,561.96$ 6.4.1.2

0 #DIV/0! 6.4.1.30 #DIV/0! 6.4.1.40 #DIV/0! 6.4.1.5

149,110

Allocated Total UnitCost Units Cost

6.4.2.16.4.2.26.4.2.36.4.2.46.4.2.5

0


96,811 27 3,585.59$ 6.4.3.152,129 11 4,739.00$ 6.4.3.2

0 6.4.3.30 6.4.3.40 6.4.3.5

148,940


13,488 1 13,488.00$ 6.4.4.120,232 2 10,116.00$ 6.4.4.2

0 6.4.4.30 6.4.4.40 6.4.4.5

33,720

Activity Drivers Final Report


Main Menu Resource Pools

Output Driver

Number of New TapsNumber of Remote LAN Setups

Output Driver

Number of Maintenance Routines

Output Driver

Output Driver

Number of Unscheduled Action Events

Number of Interface TablesNumber of ETL Routines Completed


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52,423 5 10,484.60$ 6.4.5.122,467 1 22,467.00$ 6.4.5.2

0 6.4.5.30 6.4.5.40 6.4.5.5

74,890


6.4.6.16.4.6.26.4.6.36.4.6.4

6.4.6.50


6.4.7.16.4.7.26.4.7.36.4.7.46.4.7.5

0


6.4.8.1

6.4.8.26.4.8.36.4.8.46.4.8.5

0


6.4.9.16.4.9.26.4.9.36.4.9.46.4.9.5

0

Allocated Total Unit

Output Driver

Number of End User RequestsNumber of Functional Reworks

Output Driver

Output Driver

Output Driver

Output Driver


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Cost Units Cost Ref

6.4.10.1

6.4.10.26.4.10.36.4.10.4

6.4.10.50

Output Driver


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Final Report

PurposeThis worksheet captures and reports your costs as determined by various tabs in this workbook.

Indicate the Reporting Period >

1. Departmental Costs by Resource (Baseline Cost to be Allocated)

Resource Pool Amount

3.1 Network Engineers 100,0003.2 Database Administrators 125,0003.3 Operational Management 68,5003.4 Service Support / Help Desk 225,0003.5 Hardware and Equipment 78,1003.6 External / Indirect Costs 57,1003.7 0 03.8 0 0

3.9 0 03.10 0 0

Total Resource Costs 653,700

2. Cost by Cost Objects (Final Allocated Costs)

Ref Cost Object Amount Units

6.4.1.1 New Network Taps 22,367$ 186.4.1.2 Setup Local Area Networks - Remote Sites 126,744$ 12

4.2 Installation of Network Connections and Equipment 206,315$ 135

6.4.3.1 Routine Scheduled Maintenance 96,811$ 276.4.3.2 Unscheduled Fixes and Bugs 52,129$ 116.4.4.1 Design & Develop Interfaces 13,488$ 16.4.4.2 Data Extract / Transform / Loads (ETL) 20,232$ 26.4.5.1 One Time Ad Hoc Requests 52,423$ 56.4.5.2 New Functional Procedure 22,467$ 1

4.6 Strategic and Resource Management of Data 40,725$ 4


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Total Cost Object Costs 653,700$

Out of Balance Amount 0

3. The information above can be presented in graphic form per below:

Network Engineers,100,000

DatabaseAdministrators,

125,000

OperationalManagement,

68,500

Service Support /Help Desk, 225,000

Hardware and

Equipment, 78,100

External / IndirectCosts, 57,100

Resource Cost Breakdown

Final Cost Breakdown

New Network

Setup Local ASites

Installation ofand Equipme

Routine Sche

Unscheduled

Design & Dev

Data Extract /(ETL)

One Time Ad


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New Function

Strategic andof Data


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Unit Cost

1,242.58$10,561.96$1,528.26$

3,585.59$4,739.00$

13,488.00$10,116.00$10,484.60$22,467.00$10,181.25$

Overview Activity Costing Cost Objects

Jul-07

Main Menu Resource Pools Activity Drivers


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Taps

rea Networks - Remote

Network Connectionst

uled Maintenance

Fixes and Bugs

elop Interfaces

Transform / Loads

Hoc Requests


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al Procedure

Resource Management


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Final Report

Glossary


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Glossary of Terms

Activity - Actions taken to produce some form of output, such as setting up IP addresses or Processing Inv

Usually consists of several tasks.

Activity Based Costing - A methodology for allocating resources to activities and allocating activities

to cost objects based on allocation drivers.

Activity Driver- A basis for allocating activity costs to cost objects such as customer service activities. Usu

is determined based on a cause effect relationship; i.e. the more drivers consumed, the more costs.

Actual Cost - Amount actually spent on resources per the General Ledger

Allocation -A logical method of allocating costs based on cause effect relationships that reflects consumpti

Cost Object - What you would like to assign cost to, such as the cost of services. A cost object can beanything that you want to measure cost against. For example, in the world of financialaccounting, a general ledger account would be the cost object for capturing and reporting cost.

Direct Cost - Cost that are directly traceable to the project and charged to the project without allocations inv

Drivers - The use of units, throughputs or some output that serves as the logical basis for allocating cost

Indirect Cost - Cost not directly associated with a project, but allocated to reflect the fact that the project

gets a benefit from the resource and should reflect some measure of its cost.

Period - Time periods used in the model such as one year or two quarters. The initial period used in

the model is usually the previous fiscal year for baseline data and any periods thereafter are used forplanning and budgeting in the current fiscal year.

Resource - Departmental assets (labor, equipment, etc.) that perform the work (activities).

Resource Driver- A basis for allocating resource costs to activities

Resource Pool - A set of resources (labor, equipment, etc.) that collectively comes togetherso that the organization can execute on a service or activity.

Unit Cost - Total Activity Cost divided by Driver Volume. Unit Cost are often used for comparisons and

benchmarking to reduce costs over time. Unit cost are also used for budgeting based on future expectedvolumes.


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ices.

lly

n.

lved


Main Menu Resource Pools Activity Drivers Final Report

Documents

Activity Based Costing Model