ABC foods has three product lines: Bakes, wet and frozen. ABC has four activity pools: ordering, delivering, and stocking with cost of $100/order and $80/delivery and $20/hour.
Revenue= 57,000 63,000 52,000
COGS 38.000 47,000 35,000
Purchase Orders 30 25 13
Deliveries 98 36 28
Stocking Hrs 183 166 24
a) compute ABC profit of each product line
b) how will brand managers react to charges by activity use?
c) How will activity cost per use change if the least profitable product lines were closed down?
The expert computes the ABC profit of each product line. How brand managers react to charges by activity use are determined.