Abc : An Effective Tool For Costing Products For Sellers Essay

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The main aim of this phase of the ABC implantation is to define the benefits it provides and the methods for utilizing the outputs of system information, as well as the costs relating to implementation and operation. The reasons restaurant consider going ahead with implementing ABC could be discerned as the following (Cart, 1993):

a. A high number of expensive overhead activities; plus construction, project management, and maintenance.
b. A relatively high portion of overhead costs.
c. Intense competition.
d. Invisible relations between customers’ projects and costs.
e. An intention to reduce costs.
f. Creating an effective tool for costing products for sellers.
And also this phase includes activity analysis and cost structure analysis. Activity analysis within ABC evaluates resource consumption through the identification of activity. Activity analysis provides information on what work is done, how work is done, quality of the work, time to perform the work, output of the work, patient and/or supplier relationships, and service relationship. Cost structure analysis After the activities were analyzed, the recorded activities were aggregated into activity centers, known as cost pools or cost centers, and the costs were calculated ( John, 1992) .

In addition to the first step in implementing Activity Based Costing need to a research for all the aspects of business processing. Employee involvement is main factor to make the system perform effectively and efficiently, thus

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