SOME REASONS FOR IMPLEMENTING ABC & M

• Calculating, evaluating costs more accurately
• Ensuring product and service/customer profitability
• Budgeting performing measurement
• Increase competitiveness/coping with more competition
• Supporting other management innovations e.g. TQM and JIT systems
• Supporting TOC (Theory of constraints) management innovations
• CVP (Cost-volume-profit) management innovations
• Providing behavioural incentives by creating cost consciousness among employees
• Improving product/service quality via better product/service and process design
• Responding to an increase in overheads
• Responding to increased pressure from regulators
• Evaluating and justifying investments in new technologies
• Improving working capital management
• Improving cash flow management