Activity-Based Costing Framework for Total Cost of Ownership Analysis of LLM Services — Tombor & Abonyi (2026)

1 More Paper · Sep 21, 2026 · 2h 4m

The proliferation of Large Language Models (LLMs) requires robust financial planning, yet traditional software cost models cannot capture the unique economics of generative AI. This paper presents a formal Total Cost of Ownership (TCO) framework grounded in Activity-Based Costing (ABC). We deliver a dual-layered accounting architecture: a mathematically tractable, provably convex engine for technical infrastructure costs, alongside a comprehensive, modular taxonomy blueprint for human operational, governance, and organizational cost pools. The framework systematically incorporates…