USAGE OF ACTIVITY-BASED COSTING ON A COMMERCIAL LOAN PORTFOLIO IN A SMALL BANK

摘要

The only way to control expenses is to have a better understanding of how certain products to contribute to the overall expenses in day to day operation of a bank. The traditional costing system in banking does not effectively assign actual costs to the actual transaction. This is where activity-based costing will give bank managers a greater understanding of the true cost and profitability of all transactions in daily processes in the bank. Activity-based costing can be used in all areas of banking. However for this study, we will be looking at how activity-based costing can be used to determine the true profitability of all commercial loans transitions in a small bank.