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Activity-Based Costing (ABC)

Activity-based costing (ABC) is a method of allocating indirect costs to products or services based on the amount of resources they consume. In the context of product development, ABC can be used to assign cost to different activities involved in designing, prototyping, and launching a new product. For example, the cost of research and development may be divided among different product concepts based on the amount of time and resources spent on each one. Similarly, the cost of prototyping may be allocated to different prototypes based on the number and complexity of the components involved. ABC can provide insights into the true cost of developing a new product, and help decision-makers choose the most efficient and effective development path.

Activity-based costing (ABC) is a method of allocating indirect costs to products or services based on the amount of resources they consume.

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