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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.
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Question 1 The following items are found in the trial balance of M/s Sharada Enterprise on 31st December, 2000. Sundry Debtors
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Why might managers favour this ABC system instead of the older system that allocated all MOH costs on the basis of direct? labour?
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