Suaad Jassem

Abstract : Business organizations are under constant pressure to optimize their resource utilization and find ways to maximize their profitability with minimum cost and effort. As a result, managerial accounting practices such as time-driven activity-based costing are being deployed to conduct customer profitability analysis to determine accurately how much profit is generated from each customer. Such accurate cost and profit information enables managers to pinpoint their strategies towards those customer segments that create maximum impact in terms of economic returns to the organization. This study uses a case study approach to understand how a luxury hotel uses customer profitability information derived from cost of serving customers using Time-Driven Activity-Based Costing to fine-tune their marketing strategies in order to enhance their profitability.

Keywords: Time-Driven Activity Based-Costing, TDABC, Customer Profitability Analysis, hotel management.

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