Degree of Detail in ABC

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Activity Based Costing > Forum > Degree of Detail in ABC

Degree of Detail in ABC
Simon
When planning to build an ABC model it is essential to first make the decision what level of detail ABC is to be captured. This depends on what questions are to be answered:
1. Strategic (about 100-150 Activities). This is the most common application and is used to deliver customer and product profitability and visibility where the costs are incurred.
2. Operational (500+ Activities). At this level, individual tasks are captured and these models are commonly used for process improvement.
 

 
ABC-Planning
Enzo
This depends on:
1) For one special sector it is very few probable to summarize the information.. I explain: in one sector in South America it is impossible to work with a lot of dates the one activity or reverse position more activities, few and less dates.
2) It is very interesting to applicate the ABC system when the firm has experience and the possibilities to create competitive advantages.
 

   

     

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