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Cost & pricing
Activity-based costing
Allocating overhead by the activities that actually consume it — orders processed, setups run, tickets handled — instead of a single blanket rate.
Owned by: Manager / DirectorTest band: Manager / Director
In practice
It usually reveals that small, complex customers cost far more to serve than their revenue suggests. Worth doing once, roughly, on the top ten customers.
The kind of thing the test asks
- Activity-based costing on the top ten customers usually reveals…