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LIMITATIONS OF ABC ANALYSIS
However ABC analysis is a basic tool for exercising selective control over many inventory items, it does not, in its current form, allow precise consideration of all relevant troubles of inventory management. For illustration, a never-ending trouble in inventory management is that of sufficiently handling thousands of low-value `C' items. Low-value purchases often require more items and thereby decrease the time allowance accessible to purchasing personnel for value analysis, vendor investigation, and other `B' items.
Moreover, if ABC analysis is not periodically evaluated and updated, the very approach of control might be defeated. For illustration,`C' items similar to diesel oil in a firm, will become most high-value items throughout power crisis should, hence, deserve more attention, though this point might be overlooked when classification of items is not evaluated and updated.
accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;
Least-cost-selection
Objectives of ratio analysis 1) Measuring the profitability: we can measure the profitability of the business by calculation gross profit net profit expenses ratio and other.
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How might a company use regression results to manage overhead costs?
how company apply marginal costing techniques show with an example
Prepare Summary Journal Entries to record the( 1) requistion slips
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Explain Activities uses through activities based costing In order to correctly associate costs with products and services. ABC assigns cost to activities based on their use of
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