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Activity Based Costing Calculator

Work out activity based costing instantly with clear inputs, formula shown and shareable results.

About Activity Based Costing Calculator

Activity-based costing traces overhead through the activities that cause it. Divide the cost pool by total driver units to get a driver rate, apply it to the driver units the product consumes, then divide by output to get a per-unit cost that reflects real complexity rather than volume.

Formulas

Cost driver rate

Rate = Activity cost pool / Total driver units

Allocated cost

Allocated = Rate x Driver units consumed

Worked example

With the default values below, Activity Based Costing Calculator returns Activity cost per product unit of $7.5000. Change any input above and every figure here is recalculated in your browser.

Inputs used

Activity cost pool
180,000
Total cost driver units
12,000
Driver units consumed by this product
2,600
Units of the product made
5,200

Results

Activity cost per product unit
$7.5000
Cost per driver unit
$15.0000
Cost allocated to the product
$39,000.00
Share of the activity pool
21.67%

Step by step

  1. 1Values used
  2. 2Cost driver rate
  3. 3Allocated cost
  4. 4Activity cost per product unit= 7.5000
  5. 5Cost per driver unit= 15.0000
  6. 6Cost allocated to the product= 39,000.00
  7. 7Share of the activity pool= 21.67

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

What makes a good cost driver?

Something that genuinely causes the cost and is already measured: setups, purchase orders, inspections, machine hours, deliveries.

Why does ABC change product profitability?

Because low-volume, high-complexity products consume disproportionate setups and handling. Volume-based absorption hides that subsidy.

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