Product Pricing Based on Activity-Based Costing

Activity-based costing could provide relatively accurate cost information and better serve the enterprise's product pricing decision.Through the analysis of cost behavior on activities, it divides product costs into unit level, batch level, product-sustaining level and facility level activity costs, which can avoid the overlapping between the costs caused by dividing the costs into variable cost, activity cost and fixed cost.On this base, product pricing model is established based on the information of activity based costing.Case study shows that different pricing methods get different prices, which will provide different product-mix pricing decisions for enterprises.