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ADVANTAGES OF "ABC ANALYSIS"
The advantages derived from this analysis and its consequent follow up are summarized below:
1) Facilities selective control and thereby save valuable time of busy executives.
2) Eliminates lot of unnecessary paper work involved in various other control procedures. Tangible savings can be affected in this behalf by following Two-Bin System which is very closely related with this technique.
3) Facilitates Inventory Control and control over usage of stores materials which ultimately results in cost control.
Exercise 12-7 sell or process further
How much was Topaz’s operating income (income before taxes) last year?
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How do the different cost classifications can assist the management
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given the above data what would the breakeven in units and dollars be if u wanted a necessary after tax profit of $ 36,000 (assume a 30% tax rate ) units __________ ales dollars _
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