Abc Company Essay

Benefits of ABC Company Essay

614 Words3 Pages

Benefits of ABC
It is claimed that ABC offers several important benefits at the expense of traditional cost
Systems , such as improving the accuracy of the product cost , cost more complete information
Performance measurement and related data for further processing and management decision -making,
Increases the chance of a sensitivity analysis , the value-added model of the organization
Transactions and activities ( Bhimani and Pigott 1992; . Zhong et al 1997).
Clark et al . (1999 ) , which focused on the ABC in making Irish study
Companies , and found that participants were more satisfied in all dimensions of ABC
Expected. 54 % of respondents considered more accurate determination of product cos
Results for the ABC , while seen 46% of…show more content…

Benefits of ABC
It is claimed that ABC offers several important benefits at the expense of traditional cost
Systems , such as improving the accuracy of the product cost , cost more complete information
Performance measurement and related data for further processing and management decision -making,
Increases the chance of a sensitivity analysis , the value-added model of the organization
Transactions and activities ( Bhimani and Pigott 1992; . Zhong et al 1997).
Clark et al . (1999 ) , which focused on the ABC in making Irish study
Companies , and found that participants were more satisfied in all dimensions of ABC
Expected. 54 % of respondents considered more accurate determination of product cos
Results for the ABC , while seen 46% of respondents that ABC would lead to improvement
Cost control and management. The study also identifies several other advantages of using the ABC
Including a better understanding of the causal behavior and cost, and improve performance
Measures and more accurate analysis of customer profitability and the impact of positive behavior
On staff.
Innes and Mitchell (1991 ) , Shim and Stagliano (1997 ) , Booth and Giacobbe (1997) and
Chung et al. (1997 ) , and argue that ABC is an important source of information for decision making
In product costs and profitability of the production line . Kaplan (1990 ) and Johnson
And Kaplan (1987 ) also states that the product costs crucial minutes for pricing decisions ,
Introduction of new products, as well as

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ABC Company Risk Profile

The ABC company is a manufacturing firm that specializes in making cedar roofing and siding shingles, with recent sales at $1.2 million, the company wants to reach the $3 million mark over the next 3 years. As a newly hired Corporate Controller for this company, I have been assigned the task of developing and overlooking a new plan made by the CEO that will use some of the shingle scrap materials to build cedar houses. The newly develop plan will certainly bring new challenges for the company on the form of increased cost and labor; However it will also provide additional revenue and gross profit to help reach the growth targets. On this paper I would go over the details of the report made for the CEO that includes information on the overall risk profile based on actual market conditions, a current company cash flow, the product cost and any potential investments that might accelerate profits.

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The Risk profile for this company includes several different factors that are mostly due to current market conditions, and the level of risk the company will face by adding extra inventory and expenses. Unfortunately risk is a reality of doing business, whether the company is large or small, public or private, risk will always be present since nothing on the business world warrants a guarantee. Some of the key risk points are: Inventory represents a big portion of the cash flow, therefore having extra inventory on hand will have an impact on the company’s future cash flow; payroll is also directly related to the cash flow since it takes a big portion of the monthly budget, therefore increasing the manufacturing capabilities of the factory as well as adding a new line of production will increase the payroll thus having an impact on cash flow reports; Economic downturn, that might affect prices of inventory to be purchased, therefore affecting the potential growth as well as having an impact on reaching¬†forecasted company goals.

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