# Presentation: 698642

## U.S. Fish and Wildlife Service 
Implementing ABC/M
February 2003

- Implementing ABC/M
- February 2003

## Gaining Improved Insight Into the Work Performed at each level of the Organization 

**Resources**

**Products/Services**

**Traditional **
**Cost Accounting**

- Resources are directly assigned to outputs
- Indirect costs are allocated
- No visibility into the work performed

**Notes:**
Traditional v. ABC

Remedies the “peanut butter effect”???

## The CAM-I Model

- Cost Assignment View

**Process**** View**

**Activities**

- (Work performed)

**ABM = Link**** ****to DOI SP **

**Resource **
**Drivers**

**Activity ****Drivers **

**Activity Driver**
**Best single quantitative measure of frequency & intensity of demands placed on an activity by cost objects**

**Notes:**
The CAM –I Cross diagram is meant to provide us with an basic understanding of the fundamental acitvity based costing concepts and relationships.  It reveals that work activities – located in the center intersection of the cross – are integral to reporting both the costs of processes and the costs of cost objects.  

The vertical cost assignment view explains what specific things cost, 
The horizontal process view explains what causes costs to exist and to fluctuate.  

Cost assignment view shows that resources are consumed by activities & activities are consumed by activities. Each Cost is traced based on its unique quantity or proportion of its driver. 
 Resource Drivers trace expenditures to work activities.  
Activity Drivers trace activity costs to cost objects. Activity drivers are critical to ABC/M because not only do they segment and flow the costs to reflect the diversity of the products  -- they govern the accuracies.  Activity drivers reflect the usage of each work activity.  An activity driver, which relates a work activity to costs objects – “meters out” the work activity based on the unique diversity and variation of the cost objects that are consuming the activity.  The job of the activity driver is to trace the relative proportion of the activity cost to its cost objects.   
The cost assignment view explains what specific things cost

The business process view , (business process can be defined as two or more activities with a common purpose).  Cost drivers are triggers – events or influences that cause the work activity to utilize resources to produce outputs.  Activity Costs are additive along the Process and there fore can be accumulated along the business process. -- = the total cost of performing the process.  The business process view demonstrates why things have a cost.   

The business process view – is the integrating threme the the organization’s work – it is through business processes that the organization can achieve value for our customers.  

## Resources, activities, and cost objects (outputs)

**Salary & Benefits**

**Travel**

**Stock lakes, rivers and streams**

**Develop recovery plans**

**Monitor species health**

**Atlantic Salmon**

**Steelhead Trout**

**Sml Mth Bass**

**$75,000**

**$16,000**

**Level of Effort**

**Man days of Travel**

**# stocking ops**

** ****#  health surveys**

**45**

**21**

**38**

**73**

**128**

**38**

**73**

**31**

**8**

**13**

**$38,263**

**$25,333**

**$27,404**

**$19,855**

**$47,386**

**$23,759**

**# plans/plan mods**

**26**

**12**

**31**

**19**

- Resources
- traced on the basis of time spent performing activities

- Activities

- Cost Objects

**Activity**
** ****driver**

- 1 activity to Multiple Outputs

**Notes:**
Resources are traced or assigned rather than allocated.  Because people associate allocation with a redistribution of costs that have little to no correlation between source and destination.  

Activity module – is where work is performed – resoureces are converted into some type of output – in this case it is #of specific types of species of fish.  The cost assignment or tracing step contains the structure to trace the activity costs to cost objects utilizing activity drivers. As I said before -- The job of the activity driver is to trace the relative proportion of the activity cost --  in a causal relation to the work activity being performance --  to its cost objects.  This correlation give us visibility of the business process costs in relation to the outputs produced.     

Cost objects represent the variety of outputs and services where costs accumulate. 

Assignment paths define the consumption relationship
Drivers establish the means of measuring the relationship
Driver quantities are the proportion of the relationship

## 1 activity 1 goal/objective

- FWS goal: restore to self-sustaining levels fisheries populations

- DOI goal: sustain biological communities

- FWS goal: increase opportunities for fishing on Service and military lands

**DOI goal: provide recreational opportunities to the public**

- Resource Protection

- Recreation

**Notes:**
Assignment paths define the consumption relationship
Drivers establish the means of measuring the relationship
Driver quantities are the proportion of the relationship

## 1 output, multiple goals/objectives

- FWS goal: restore to self-sustaining levels fisheries populations

- DOI goal: sustain biological communities

- FWS goal: increase opportunities for fishing on Service and military lands

**DOI goal: provide recreational opportunities to the public**

- Resource Protection

- Recreation