What is an Activity Dictionary?

An activity dictionary is a document that identifies and describes each of the activities within a business. It is a useful reference for anyone involved in an activity-based costing or activity-based management effort, since it provides a massive amount of information that can be incorporated into an analysis project. The dictionary includes the following items:

Name of the activity. This is a brief description of the activity.
Name of the related business process. This is the process within which the activity is located.
Description of the activity. This describes the function of the activity.
Tasks associated with the activity. This briefly itemizes the tasks performed within the activity.
Outputs generated by the activity. This states the different types of outputs generated by the tasks within the activity.
Measurements for the output of the activity. This states the metrics being used to measure the output generated by the activity.
User(s) of the activity. This identifies the job positions that participate in the activity.
Value added or non-value added flag. This flag indicates whether the activity adds value to the underlying product. It is used for non-value-added analyses.
Cost drivers associated with the activity. This is whatever triggers a change in the cost of an activity, such as the number of direct labor hours worked or the number of machine hours used.