ABC is crucial because it tells managers which products or services make or lose money - they usually don't know. Traditional cost allocations often depict an unrealistic, inadequate view of profitability, sometimes distorted by hundreds of percent. In most cases, ABC is designed to provide profitability information for each segment of their product/service market matrix. After learning about the specific products, services or customers that make or lose money, managers can choose an effective …showed first 75 words of 192 total…

…showed last 75 words of 192 total…are the benefactors of the activities you perform, all enable you to manage what you do instead of simply how much you spend. ABC is the catalyst for process improvement and management, performance measurement, and customer/product/service optimization. We see ABC becoming the standard economic analysis tool for all decision makers - the sooner your organization begins its ABC journey, the further ahead of the competition you'll be. Bibliography bjornenak.t and olson ,o