February 2007
Intermediate to advanced
266 pages
7h 11m
English
Content preview from Time-Driven Activity-Based Costing
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CHAPTER FIVE
WHAT-IF ANALYSIS AND ACTIVITY-BASED BUDGETING
Forecasting Resource Demands
COMPANIES REAP the full benefits from Time-Driven ABC only if they adjust the supply of their resources to the demands from products and customers. Companies can improve processes, rationalize their product mix, and modify customer ordering and delivery patterns to eliminate transactions that make excessive demands on resources. None of these actions, however, produce profit improvements by themselves. The actions free up considerable amounts of capacity throughout the enterprise. But companies capture the bottom-line benefits from their newly released capacity only if they can sell more or spend less.
If a company can increase sales when it has excess capacity, ...
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