Abstract
This article presents an estimating model for determining how overhead costs might be allocated to different products. The model, which is loosely based on Activity-Based Costing (ABC), incorporates Saaty's Analytical Hierarchy Process (AHP) in estimating the overhead costs associated with each product. The proposed model uses overhead cost categories, and other cost-correlated information, as well as managers' subjective judgements for detail classification of overhead costs when “hard” data are not available. This model allows business to determine the benefits of ABC before actual implementation. A real-world example illustrates the model.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
