Activity Center

See Activity Based Costing, or ABC. Not the TV network.

When costs are assigned in a given bean-counting summation, one method of assessing what a given activity actually costs is to measure the volume, productivity, or general noise that the center of that activity makes in the process.

A gold mining operation might have three different shaker machines. One very expensive one, one medium priced, and one which makes the porridge very cheap. But the actual cash cost of each machine may or may not reflect the volume of gold each one produces, because at times, the paydirt going through those shakers may or may not be rich in gold.

So activity center based cost accounting tries to associate intelligent renderings of what the activity contributed to the production of profits of the company relative to everything else, more or less.