Activity Based Costing is an improved costing methodology that emerged in the early to mid 1990s. Kaplan and Scott introduced this approach as they felt that the traditional costing approaches were no longer relevant in the knowledge economy.

The ABC method has some detractors - there are some that feel the cost and effort to derive ABC costs outweigh any benefits derived from the information. Over-complex ABC analysis is definitely not necessary. However, some ABC analysis is essential in any business environment that wishes to get a more accurate understading of its product and customer profitability.

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• Activity-Based Costing Doesn’t Need Expensive Technology
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• Use Activity Based Costing to Optimize Prices
• Analytical Techniques To Help Improve Customer Relationships
• Unravelling the Data Mining Mystery - The Key to Dramatically Higher Profits