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The Basic Concepts Involved in Activity-Based Costing (ABC) Can Be

question 32

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The basic concepts involved in activity-based costing (ABC) can be used to determine customer profitability as well as product costs.


Definitions:

Customer Value

How a customer views the value of a product or service as opposed to the alternatives they might consider.

Quality Costs

The expenses associated with preventing, detecting, and correcting defective work, categorized into prevention, appraisal, and failure costs.

Total Quality Management

A comprehensive management approach focusing on continuous improvement in all organizational processes, aiming for long-term success through customer satisfaction.

Target Selling Price

The price at which a company aims to sell its product or service, determined by factors such as cost, market demand, and competition.

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