Browse Definitions:
Definition

ABC costing (activity-based costing)

Contributor(s): Matthew Haughn

Activity-based costing (ABC costing) is a method used to arrive at a cost price for a product – the total of direct and indirect costs required for production -- by identifying and costing all associated business activities.

A brief example of how to conduct ABC costing:

  1. Identify the business’ main activities.
  2. Identify the activities’ cost drivers -- processes and activities that determine what a given activity costs the business, such as the number of orders.
  3. Assess the costs that go into each activity.
  4. Assign product costs based on rates of use of each activity.

ABC costing management software is available from a number of vendors including Acorn Systems, proDaCapo and QPR CostControl. Activity-based costing is also a component of many enterprise resource planning (ERP) and corporate performance management (CPM) products.

ABC costing is considered a supplemental costing method rather than sufficient unto itself.

This was last updated in June 2016

Continue Reading About ABC costing (activity-based costing)

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

SearchCompliance

SearchSecurity

  • copyright

    Copyright is a legal term describing ownership of control of the rights to the use and distribution of certain works of creative ...

  • keylogger (keystroke logger or system monitor)

    A keylogger, sometimes called a keystroke logger or system monitor, is a type of surveillance technology used to monitor and ...

  • password

    A password is an unspaced sequence of characters used to determine that a computer user requesting access to a computer system is...

SearchHealthIT

SearchDisasterRecovery

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • call tree

    A call tree -- sometimes referred to as a phone tree -- is a telecommunications chain for notifying specific individuals of an ...

  • mass notification system (MNS)

    A mass notification system is a platform that sends one-way messages to inform employees and the public of an emergency.

SearchStorage

  • CompactFlash card (CF card)

    A CompactFlash card (CF card) is a memory card format developed by SanDisk in 1994 that uses flash memory technology to store ...

  • email archiving

    Email archiving (also spelled e-mail archiving) is a systematic approach to saving and protecting the data contained in email ...

  • RAID (redundant array of independent disks)

    RAID (redundant array of independent disks) is a way of storing the same data in different places on multiple hard disks to ...

SearchSolidStateStorage

  • M.2 SSD

    An M.2 SSD is a solid-state drive (SSD) that conforms to a computer industry specification written for internally mounted storage...

  • NVMe (non-volatile memory express)

    NVMe (non-volatile memory express) is a host controller interface and storage protocol to enable a solid-state drive to use the ...

  • SSD RAID (solid-state drive RAID)

    SSD RAID (solid-state drive RAID) is a methodology commonly used to protect data by distributing redundant data blocks across ...

SearchCloudStorage

  • RESTful API

    A RESTful application program interface breaks down a transaction to create a series of small modules, each of which addresses an...

  • cloud storage infrastructure

    Cloud storage infrastructure is the hardware and software framework that supports the computing requirements of a private or ...

  • Zadara VPSA and ZIOS

    Zadara Storage provides block, file or object storage with varying levels of compute and capacity through its ZIOS and VPSA ...

Close