ABM

is an acronym for Activity Based Management.

Activity-Based Management (ABM) uses ABC information to improve processes, control cost drivers, and enhance performance. It links activity costs to strategic decisions and continuous improvement.

- Used in product/service costing, budgeting, and variance analysis.
- Used to support pricing decisions and profitability analysis by cost behavior and drivers.

- Example: The costing team uses **ABM** to allocate costs and analyze margins by product line.

- Why it matters: Improves cost accuracy, supports better pricing and budgeting, and strengthens performance measurement.