Financial Executives Use Their ABC's

Activity-Based Costing (ABC) as a new tool to measure costs for better decision making is gaining in acceptance and use, according to a survey of the Cost Management Group (CMG) of the Institute of Management Accountants (IMA).

Firms adopting ABC hit a new high of 49 percent in 1996, and organizations using it for decision making report it is worth the implementation costs.

Results of the survey included the following:

53 percent of the companies adopting ABC use it for decision making in areas other than accounting, such as in marketing and engineering;

32 percent of the CMG respondents said their companies use ABC for operating or strategic decision making; and

15 percent use it for financial reporting, thus replacing their traditional cost system.

Of the 51 percent of the respondents' firms who have not adopted ABC, half said they are considering it.

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URL: http://www.umsl.edu/~sauter/DSS/book/abc.htm
Page Owner: Vicki Sauter (SAUTER@UMSLVMA.UMSL.EDU)
Last Modified: April 2, 1997