ion generated by ABC about an activity for controlling the activity itself rather than using the cost of the final products only. The cost drivers that trigger the activity are also identified and monitored. These cost drivers may be different from the resource or activity drivers. In addition performance measures are developed and monitored to judge the efficiency at which the activity is being performed. These measures may be financial or non-financial variables such as cost per units of activity driver, defects per million items produced or time taken per unit of item produced. These measures then provide a sound basis to the control the performance of the activity with accurate information about the costs involved.ABM has number of benefits to offer. Here, the focus of attention is an activity rather than a department. A department may have a number of activities which if not segregated may diffuse the vision of the managers while making a particular decision. The areas where specific benefits have been derived from ABM are followingA. Determination of product/service costs B. Improvements in performance and activities C. Cost cutting and downsizing D. Other applications. Number of benefits are high and harmful effects are less....
