Activity-based costing (ABC) is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. This model assigns more indirect costs (overhead) into direct costs compared to conventional costing models.
Read more about Activity-based Costing: Aims of Model, Prevalence, Methodology, Application in Routine Business, Integrating EVA and PBC, Limitations
Famous quotes containing the word costing:
“Thatcher: Now tell me honestly, my boy. Don’t you think it’s rather unwise to continue this philanthropic enterprise, this Inquirer that’s costing you a million dollars a year?
Charles Foster Kane: You’re right, Mr. Thatcher. I did lose a million dollars last year. I expect to lose a million dollars next year. You know, Mr. Thatcher, at the rate of a million dollars a year, I’ll have to close this place in sixty years.”
—Orson Welles (1915–1985)