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An analytic hierarchy approach to activity-based costing
Journal article   Peer reviewed

An analytic hierarchy approach to activity-based costing

Fariborz Y. Partovi
International journal of production economics, v 22(2), pp 151-161
1991

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.

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10 citations in Scopus

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Web of Science research areas
Engineering, Industrial
Engineering, Manufacturing
Operations Research & Management Science
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