Dear experts;
whether depreciation is facility sustaining or nor in ABC?. if yes, whether we need to avoid it or not?
whether depreciation is facility sustaining or nor in ABC?. if yes, whether we need to avoid it or not?
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PMABC-Facility sustaining related problem
Facility-level activities such as plant depreciation, property taxes, utilities are activity costs. We need to recognise these.
from text, i understand that we need to avoid these costs in ABC bcoz there is no direct cost drivers can be identified for these activities. and this is one of the drawback of ABC.
looking for some experts opinions.
looking for some experts opinions.
13y ago#3good question, how cost can be avoided only because ABC chosen?
for facility sustaining costs, we can not find an accurate cost drive. eg. depreciation, insurance etc. so in most case ABC will exclude this cost.
this will adjust in the margin to the costs. So we can this is one of the demerit of ABC.
pls refer F5 BPP book.
this will adjust in the margin to the costs. So we can this is one of the demerit of ABC.
pls refer F5 BPP book.
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