Activity-Based Costing (ABC) which has become an important aspect of manufacturing or service organizations can be defined as a methodology that measures the cost and performance of activities, resources and cost objects. It can be considered as an alternative paradigm to traditional cost-based accounting systems. Customer Profitability Analysis (CPA) is an important path to a more successful business operation, offering new insights into enhancing company performance. A well-designed and implemented ABC system is a powerful aid to management evaluation and decision-making, thereby improving organizational performance. This paper was aimed at unravelling the practical complexities of implementing ABC for CPA purposes.


Activity-Based Costing (ABC) Customer Profitability Analysis (CPA) Activities Cost 


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© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  • Zhao Wei
    • 1
  1. 1.School of Economics & ManagementShenyang Ligong UniversityShenyangChina

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