Improving Business Outcomes with Activity Based Costing

The Problem

A metals and mining company sought to implement Activity Based Costing (ABC) to allocate costs more accurately to specific activities and products based on their actual resource consumption. This approach would provide a more precise understanding of operational costs compared to traditional costing methods, enabling better cost management and process optimization.

The Solution

Dimensional Strategies Inc. (DSI) extracted, engineered, and modeled data to allocate costs across key mining activities such as drilling, blasting, and hauling, along with associated sub-activities. ABC reports were then made available to line managers, allowing them to baseline costs and monitor improvements as process inputs were adjusted. This approach empowered the company to gain better visibility into operational efficiency and make informed decisions to optimize costs.