Definition

Activity-based cost (ABC)

Activity-based cost (ABC) refers to accounting procedures that can quantify the true profitability of different activities by identifying their actual costs. ABC accounting tries to identify the real costs associated with serving each customer- the costs of products and services based on the resources they consume. The company estimates all revenue coming from the customer, less all costs.

Share it:  Cite

More from this Section

  • List broker
    List broker which firm that sells lists. It does not usually hand over the list but will ...
  • Market-penetration pricing
    Market-penetration pricing refers to set a low initial price to penetrate the market quickly ...
  • Location based marketing
    Location based marketing means involves promotional offers that are pushed to mobile devices ...
  • Positioning statement
    Positioning statement refers to a statement that summarizes company or brand positioning. ...
  • The selling concept
    The selling concept holds that consumers and businesses, if lift alone, won’t buy enough ...