Costs traced to the activities that drive them — the most accurate overhead allocation method.
Traditional cost allocation methods that spread overheads by headcount or revenue are simple but systematically misleading. They consistently under-cost complex, high-volume, low-margin activities and over-cost simple, low-volume, high-margin ones.
We implement Activity-Based Costing frameworks that identify the specific activities that drive overhead costs and allocate them to products, customers, and services based on actual consumption.