The Ledger

Curated content for
analytical business leaders
Back to The Ledger

Is Activity-Based Costing Worth It?

Manufacturing companies need to understand product costs accurately and in detail. This kind of information is essential for planning operations, pricing, and evaluating business margins. Activity-based costing helps manufacturers identify what products are truly profitable, the true costs of products for pricing, and what activities are driving costs. However, activity-based costing is known for being difficult to apply and labor-intensive due to the extensive data needs of the process. The trick to knowing if activity-based costing is worth the trouble is first finding a tool that can compute accurate product costs and has the capabilities to take the labor and data needs off your hands.

Read More at The Business Case >