Overhead costs replace direct costs.  American scientists have analyzed the weakness of the traditional approaches. The obtained results triggered the development and implementation of the new approach to the overhead cost allocation allowing specifying the unit cost. The developers of the new approach R. Cooper and R. Kaplan called their method Activity based costing (АВС), which is translated by Russian economists as operation calculation, activities calculation, functions calculation. Due to different interpretations and translations of the abbreviation the method is recognized in Russian practice as costing, i.e. unconventional calculation system considering the operations as the source of expenses. ABC-method is based on the next principle the expenses result from operations (activities) not from production. One and the same product can be turned out at different resource expenses, even by one company. The incurred expenses depend on various factors selected technology, error rate, modifications, defect rate, number of executive staff in charge of the production process, etc. Therefore, the resources needed and the company aggregate costs depend on the business- process organization. Production is the result of this activity, thus it does not generate expenses as such. Production self-cost results from the company process organization, the level of the company, its employees and partners sophistication [2, 6]. Basically, the distinctive features of the АВС method are treatment of indirect costs and approaches to the collection of information. In the traditional system “top-down” approach is used to set the overhead target costs which are distributed with the limited number of expense measurements without distribution. АВС method involves down- top approach to the data collection followed by overhead costs evaluation allowing to group, trace and attribute them to the expenses on the grounds of cause and effect relationship. АВС method suggests specification of business process and activity based costing. If to consider the structure of the method it will include the next stages selection of cost objects,(activity type, data collection grouping of activity based costs
М И К Р О Э К О Н О М И К А Journal of Economy and entrepreneurship, Vol. 7, Nom. 12-1 specifying the cost factor for every group assessment of overhead costs and their cost object allocation. The first stage of the ABC method implementation is specifying the types of activity (functions) which form its basis. By the types of activity we mean the operations performed by the staff, equipment for the product manufacturing requiring an increasing part of the costs. The standard procedure is to interview the employees responsible for the company principal activity to describe their basic actions. The second stage is grouping of activity based costs. Initially, the list of the activity types is long therefore it is necessary to group overhead costs for every type of activity. To reduce the list homogenous operations are combined. For example, we can combine some actions concerning the arrival of raw materials ranging from shipping to cargo segregation and storage. All these actions can be considered as cargo handling, etc. The key feature of this stage is taking into consideration the level at which the activities are grouped (e.g. production, lot, consumer, etc. The third stage is specifying the cost factors influencing the expenses. To define the factors influencing the activity expenses the term cost driver is used. For every group of the overhead costs a cost driver is selected which helps to connect the activities performed and the resources consumed. The selected factor must adequately cover resource consumption by this type of activity as it regulates the accuracy of the product cost accounting. There are two most common types of factors – operational and temporal. Operational factors are measures of the number of operations (activities) such as the number of accounts drawn by the customer, the number of the company employees – for personnel management, etc. Temporal factors determine the amount of time required for the operation performance, e.g. time for equipment adjusting or product quality audit. They are considered to be more accurate cost measures, though being more difficult to record. Therefore, numerical measures are used more often. The fourth stage is overhead costs assessment with regard to the groups and their cost object allocation. The method involves further specification and object costs tracing and production requirement for this type of activity. The next operation at this stage is consumption expenditure calculation for every type of resource. It is achieved with these- lected cost factor. The consumption expenditure is defined as the product of cost factor by work output cost. As a result we understand what resources are required for certain types of activities and their standard expense of allowance [1, 3, 5]. As for production requirement fora certain type of activity it is measured by the number of operations performed by the cost driver for the production. For example, aggregate costs of equipment adjustment amounted to 100 000 units of currency and there were 100 adjustments over a period. The overhead rate is 1000 units of currency per adjustment. The specified rate of the product adjustment 1 The term cost driver (synonyms factor, driver, expense measure) is used to denote events or efforts taken which regulate the activity cost value. cost is determined as follows the number of the product adjustments is multiplied by 1000. It follows therefrom that expenditure on one item for the production lot of 20 items will amount to 50 units of currency (1000/20). With this approach ABC system allows to calculate other types of costs up to the final product. Thus, we do not just develop a formal mechanism of costs transfer using the provisional figures but trace cause effect relationship between types of activity and cost objects. Within the framework of the function cost system long-term cost control is performed through activity control. Thus, activity is considered to be the object of control not the costs because the costs result from activity. Currently, ABC system is viewed not as a method of expenditure accounting but as а management tool because it ensures better understanding of the cost factor by executive management. Therefore there arise possibilities for more efficient cost management, reducing or eliminating the types of activity which do not add to the costs, and possibilities for improving certain business processes. АВС information formed the basis for the concept development including АВС (Activity based costing, АВВ (Activity based budgeting, АВМ Activity based management. АВМ combines lean production principle with ABC business practice. Business process management based on the system research of these three aspects was called activity type or business activity management method, focusing on the waste elimination and value improving activity. In general, the methodology is based on the system of measures ensuring competitive growth and involving the next indexes quality, time and expenses which are to be analyzed and improved [1, 3].