Nalinee
26-11-07, 04:52 AM
Implications of switching to ABC for following point
Pricing = Change cost per unit & accordingly price calculation
Sales strategy = Allocation of overhead to the product will change and accordingly profitability of the product will change if the prices are market driven
Decision making = ABC system can provide accurate costs of the products by refining the method of overhead cost allocation
Performance management = ABC points out fact that activities give rise to costs
.
Pricing = Change cost per unit & accordingly price calculation
Sales strategy = Allocation of overhead to the product will change and accordingly profitability of the product will change if the prices are market driven
Decision making = ABC system can provide accurate costs of the products by refining the method of overhead cost allocation
Performance management = ABC points out fact that activities give rise to costs
.