OH costs were low, now high

Why
Available IT

Activity causes costs

Producing products creates demand for
What activities
Costs are assigned to a product on the basis
Customer profitability analysis and on the activities it consumes
Profitability differs between customers
ABC ABC Identify major activities
ABC helps identify these customers
Identify cost drivers
How Collect cost of each activity
Charge to products on basis of useage of
3. Modern Developments 1 activity
03/10/2004 - v3
P35 - 2.3
Merits & Criticisms P50 5
Need to understand cost drivers
NVA Activities

Other uses
C:\Documents and Settings\Rich\My Documents\Business\CPA\Professional 1\Strategic Management Accounting\3. Modern Developments.mmp - 03/10/2004 - -