Patent attributes
A computer system, computer-readable medium and a method for performing activity based cost modeling. A cost object array has dimensions defined by weight arrays each corresponding to facets of the business by which one would assess profitability and efficiency, such as by products and customers. Each element of the weight arrays represents a user-definable classification, such as particular product families or geographic regions, and is assigned an allocation weight. A cost driver array has the same dimensions as the cost object array comprising metrics, such as the quantity sold or dollars of revenue. A weighted allocation factor for each cost object is a function of the allocation weights and the cost driver for that cost object, normalized over all the cost objects. Activity costs are allocated to a particular cost object in proportion to the weighted allocation factor associated with that cost object.
