One of the fundamental prerequisites for managerial decision-making, cost control, and enhancing financial transparency in organizations is the accurate determination of service costs. The Urban Jobs and Agricultural Products Organization of Mashhad Municipality has a complex cost structure due to the wide variety of services, multiple stakeholders, and the heterogeneous nature of its activities, including permanent, temporary, and mobile markets. Under such circumstances, reliance on traditional costing systems limits the ability to provide accurate and reliable cost information.

This applied research was conducted as a case study in the aforementioned organization. The required data were collected through the review of financial documents, semi-structured interviews with managers and process owners, and information related to activities and resource consumption during the fiscal year 2025. In the research process, organizational activities were identified and classified into 13 main activities and 22 support activities. Resource costs were assigned to activities using resource drivers, and support activities were allocated to main activities using the reciprocal allocation method. Finally, service costs were calculated based on the level of activity consumption, and an activity-based costing (ABC) model was developed.

The findings indicate that the implementation of the ABC model leads to more accurate allocation of indirect costs, establishes a logical relationship among resources, activities, and services, and provides a more realistic picture of service costs. A comparison between two selected markets, Saremi Market (the largest temporary market) and Piroozi Market (the smallest temporary market), shows that traditional costing leads to cost distortion due to uniform allocation, whereas the ABC model produces more accurate estimates based on actual activity consumption. Overall, the results demonstrate that the proposed model provides more accurate and practical information for managerial decision-making in pricing, budgeting, and planning.