Unformatted text preview: product based on the number of set-ups that product required. Activity-based costing is beneficial because it results in more accurate product costing and in more careful scrutiny of all activities in the value chain. For example, if a product's cost is high because it requires a high number of set-ups, management will be motivated to determine how to produce the product using the optimal number of machine set-ups. Both manufacturing and service companies now widely use ABC. Allied Signal and Coca-Cola have both enjoyed improved results from ABC. Fidelity Investments uses ABC to identify which customers cost the most to serve....
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- Fall '11
- overhead costs, increasingly large component