Using the Analytic Hierarchy Process and multi-objective programming for the selection of cost drivers in activity-based costing

Activity-Based Costing (ABC) makes use of multiple cost drivers. The selection of these cost drivers from a set of candidate cost drivers can pose a difficult selection problem. This paper proposes the use of the Analytic Hierarchy Process and a multi-objective programming methodology as aids in making cost driver selections. A demonstration of the application of these methodologies in ABC cost driver selection is presented. The informational efficacy of the proposed combined methodologies is also discussed.