Activity Based Costing for Decision Support


PCS Consulting’s Mark Stevens and alliance partner Doug Hicks explore the advantages and cost associated with using Activity Based Costing over traditional costing methodologies for managerial and executive decision support.

Much has been made of Activity Based Costing over the last two decades and yet most organizations are not taking full advantage of this methodology. In fact, many organizations are not yet using ABC and still using traditional cost accounting as their one and only cost information source. For the companies that are using ABC, most are focused on providing period product and customer profitability reporting. While this is very useful information to have, it is missing the most valuable capabilities of ABC when used as a decision support system.

This paper discusses the use of ABC as a decision support tool for executives and managers to make more informed, better decisions to enhance their organization’s performance.


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