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Basics of ABC Costing

Learn the basics of ABC costing with a simple example walkthrough. Establishing an ABC system is crucial, but this presentation simplifies the process. Discover how ABC data aids in preparing management reports that optimize resource allocation for profitability.

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Basics of ABC Costing

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  1. Basics of ABC Costing

  2. ABC Costing The application of ABC costing techniques is simple and this presentation will walk through an example. The most complex part of an ABC system is establishing the system.

  3. A Simple ABC Example

  4. A Simple ABC Example

  5. A Simple ABC Example

  6. A Simple ABC Example

  7. A Simple ABC Example

  8. A Simple ABC Example

  9. A Simple ABC Example

  10. A Simple ABC Example

  11. A Simple ABC Example

  12. A Simple ABC Example

  13. A Simple ABC Example

  14. A Simple ABC Example

  15. A Simple ABC Example

  16. A Simple ABC Example

  17. A Simple ABC Example

  18. Management Reports The most common management reports prepared with ABC data are product and customer profitability reports. These reports assist companies in allocating their resources to the most profitable opportunities These reports also highlight the most profitable products and customers.

  19. Customer A Margin ReportOne order for 27 cabinets

  20. Customer B Margin ReportFour orders; 100 cabinets sold in total

  21. Product Margin ReportNote no customer support included

  22. Product Margin ReportCustomer support and organizational costs included

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