The Value of Activity-Based Costing

by Kenneth Rau

Activity-based costing has been demonstrated to be a useful cost-accounting method when applied to product-line profitability analysis. Its results have been used to identify and eliminate unprofitable products, customers, channel partners, and territories. Perhaps more important, the findings on activity-based costing have spurred changes in business and product development strategies and, in many cases, business tactics.

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The Value of Activity-Based Costing September 2004