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Related Experiment Video

Updated: May 16, 2026

Using Visual and Narrative Methods to Achieve Fair Process in Clinical Care
14:32

Using Visual and Narrative Methods to Achieve Fair Process in Clinical Care

Published on: February 16, 2011

Applying the ABCs in provider organizations.

Seema Pandey1

  • 1Infosys Public Services, Reston, VA, USA. seema_pandey@infosys.com

Healthcare Financial Management : Journal of the Healthcare Financial Management Association
|November 24, 2012
PubMed
Summary
This summary is machine-generated.

Activity-based costing (ABC) is an accounting method that identifies costs by tracking activities and their drivers. This technique helps prevent financial issues by aligning accounting costs with actual expenses.

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Area of Science:

  • Business and Management
  • Accounting

Background:

  • Organizations face financial risks when accounting costs differ from actual costs.
  • Activity-based costing (ABC) offers a solution to this discrepancy.

Purpose of the Study:

  • To explain the principles and application of Activity-based costing (ABC).
  • To highlight ABC's role in mitigating financial problems arising from cost deviations.

Main Methods:

  • ABC analysis involves two key factors: cost elements and cost drivers.
  • Cost elements are measurable units of cost (e.g., item cost).
  • Cost drivers are measurable features of service usage (e.g., frequency of use).

Main Results:

  • ABC provides a more accurate reflection of true costs by linking expenses to specific activities.
  • This method is most effective in service areas with predictable resource consumption and identifiable service units.

Conclusions:

  • Activity-based costing (ABC) is a valuable accounting technique for improving cost accuracy.
  • Proper application of ABC can help organizations avoid significant financial problems related to cost management.