akyat bundok atbp.

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Material No.: 3 Call No.: FM1.20.2-2010-3
Title: akyat bundok atbp. Author: Eduardo A. Morato, Jr.
Management Function: Financial Management Management Sub-function: Financial Analysis (Ratios, Cash Flow/Funds Flow)
Type of Material: Case Study Industry or Sector: Trade
Supplements: Teaching Note Issue Focus: Entrepreneurship
Copyright By: ACEME, Inc. Copyright Year: 2010
Published by: ACEME, Inc. Published in: Makati City
Year of Setting: 2010 Country of Setting: Philippines
Additional Topics: Activity-Based Costing,Market Research,Product Line Analysis Source(Course): Master in Entrepreneurship
Body Length: 5 pages Annex/es Length: 0 pages
Abstract

The first part of the case talks about the processes that ABA's products (backpack, tent and sleeping bag) undergo, from product conceptualization up to recording sales transactions. Due to the various costs incurred along the way, Susan Dizon is faced with the difficult task of determining the full cost of each product. She then decides to adapt Activity-Based Costing, a methodology she thinks would be more acceptable to the company president than merely computing costs based on proportionate sales of each product. The different teams involved in the manufacturing, delivery and selling of the three products provided information to Ms. Dizon to help her out allocate process costs attributed to each product. The challenge in coming up with the formula though depends on these essential criteria: the real cost driver must have been identified; the time involved and relative ease of using the formula must be considered as well as its cost-benefit assessment component. 

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