Answer
ABC information is valuable for:
Pricing Decisions: ABC helps set appropriate prices by revealing the true cost of producing different products or services.
Product Mix Analysis: It aids in identifying profitable and unprofitable product lines, guiding decisions on what to produce or discontinue.
Cost Reduction Strategies: ABC highlights cost drivers, enabling organizations to target areas for cost reduction and process improvement.
Customer Profitability Analysis: It helps assess the profitability of different customer segments, assisting in marketing and service strategies.
Work Step by Step
ABC information is valuable for:
Pricing Decisions: ABC helps set appropriate prices by revealing the true cost of producing different products or services.
Product Mix Analysis: It aids in identifying profitable and unprofitable product lines, guiding decisions on what to produce or discontinue.
Cost Reduction Strategies: ABC highlights cost drivers, enabling organizations to target areas for cost reduction and process improvement.
Customer Profitability Analysis: It helps assess the profitability of different customer segments, assisting in marketing and service strategies.
