When a European controller group asked a Japanese controller about activity- based costing, the response was: "That is too complicated for us." This is a nice and polite answer that cannot be added to.
Assume that several of your competitors are investing a lot of time and money in activity-based costing. Use this phase to create a pragmatic and decision-oriented planning system that motivates you and your team whilst supporting your decision-making processes.
Multi-level fixed cost absorption has proved worthwhile in many cases for this. With little effort it reveals where you are earning money and where you are losing money. You can abstain from using coding and other concealment techniques from the operational toolbox and obtain clear and impressive statements.
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