Consequences of ABC Analysis


 
Activity Based Costing > Best Practices

Consequences of ABC Analysis
Sharon
If Activity-based Costing has been correctly implemented, and it turns out a product is causing losses, does this mean automatically that the product should be discontinued?
 

 
activity based costing
vijay
The product should not be discontinued. To produce that particular product (in spite of loss) could be a strategic decision. For example, you get ord...Sign up
 

 
Loss-making products
Jake
Agree with Vijay: there can be strategic or other valid reasons to continue the product, even if a correct ABC analysis shows it is causing losses. O...Sign up
 

 
Loss-making products
Simon
Firstly one should never make the fatal mistake and discontinue unprofitable products and customers without thorough investigation. There are valid re...Sign up
 

 
Analysis
Kostadin Nedyalkov Krastev
Conversion costs are constraining the product mix. Product and customer sustaining activities can be reorganized to make a better branding. Customer r...Sign up
 

   

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