ABC

Definition

A cost analysis method that assigns expenses not to departments or products, but to the specific activities that generate those costs. Instead of asking "how much does the logistics department cost," ABC asks "how much does it cost to send one order from receipt to delivery."

Business application

In process auditing, ABC identifies which steps in a process generate the highest operational costs. A production planner may look inexpensive on a payroll sheet, but if 63% of their time is spent re-entering data, the true cost of hidden administration runs to hundreds of thousands of PLN per year.

In QA10