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Purpose of Activity Based Cost Management

The purpose of ABC/M is to provide visibility into the cost and performance of DOI-wide processes and outputs, as well as provide individual Bureau program and financial managers with consistent information, training, and tools to apply and use ABC/M information to improve business operations. ABC/M allows the Department to break its mission down into specific work activities to measure costs and performance. This information allows the Department to improve program performance, assure that the Departmental budget supports best value results, respond to customer demands, and plan for workforce skills needed to deliver program commitments.


ABC/M DESCRIPTION: ABC/M is a management tool that provides information about the cost of doing work and how work aligns with the Department's strategic objectives. ABC/M is a methodology that allows an organization to focus on the activities or work done that generate cost, and to analyze what influences the amount of cost, what causes cost to occur, the cost of work performed, and the outputs produced from the work done.

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