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Activity-based costing

1) Given the initial cost and complexity of data to be captured, can you think of any instances when implementing activity-based costing (ABC) may not be a wise business decision?

2) What are some typical costs in a manufacturing or service organization that may be "lost" (transparent) when calculating the firm's profitability on a product or service?

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1) Given the initial cost and complexity of data to be captured, can you think of any instances when implementing activity-based costing (ABC) may not be a wise business decision?

More time consuming to collect data: The costing information is often important for quoting prices and making tender bids. The collection of data in ABC often leads to deadlines expiring and competitors weaning away business.

Cost of buying, implementing and maintaining activity based ...

Solution Summary

What are some typical costs in a manufacturing or service organization that may be "lost"
(transparent) when calculating the firm's profitability on a product or service?

$2.19