Strategic ABM

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    Customer Profitabilty analysis is a good example of Strategic ABM as ovhds are allocated to customers not products.

    What kind of ovhds are being referred to….Production ovhds or Marketing ovhds?

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    Prod o/h is regarded as an indirect cost so it excludes the direct costs it may include electricity costs used on producing those goods & depreciation etc, these are not directly attributable to goods but even though we have to deal with them exaclty like direct labor or direct material cost as in cost allocation sense of a product.

    Mrketing O/h is itself covers under non=manufacturing o/h it includes promotional expenses for a product and advertising via on TV, Radio or newspapers etc .

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