ABC is still at a relatively early stage of its development and its implications for process control may in the final analysis be more finportant than its product costing implications. It is a good time for every organisation to consider whether or not ABC is appropriate to its particular circumstances.
J Ines & F Mitchell, Activity Based Costing, A Review with Case Studies, 1990.
You are required:
(a) to contrast the feature of organisations which would benefit from ABC with those which would not;
(b) to explain in what ways ABC may be used to manage costs, and the limitations of these approaches;
(c) to explain and to discuss the use of target costing to control product costs.