AMA
Table of content
1. Outline of chosen Hong Kong company………..…….……………….P.3
2. Characteristics of an organization contributing to the use of activity based techniques ………………………………………………………….……P.4-5
3. An appropriate ABM example in chosen company……......................................................................................P.6-8
4. How the ABM information can be used by managers………………….……………………………………...……….P.9
5. Problem causing an organization to decide not to use or to abandon use of activity based techniques…………………………………………P.10-P.11
6. Reference List……………………………………………….…………………..……P.12
Luen Yick Electrical Mfg Co., Ltd.
Since 1968, the group has been a manufacturer of electrical accessories and lighting products with a wide range of furniture and bathroom lights, fluorescent,
energy saving and LED lighting products to the international market. From
product design to final assembly, all production processes are done in-house,
which makes customizing products easy for us.
Number of employees: 201-500
Year Established : 1968
Nature of Business : Manufacturing
Major export markets : Hong Kong
Products / Services: electrical accessories and lighting products
Activity Based Costing (ABC) is a costing methodology used to trace overhead costs directly to cost objects, i.e. products, processes, services, or customers. Costs are assigned to specific activities (e.g. engineering, manufacturing or purchasing) based on their use of resources and costs are assigned to cost objects based on their use of activities. ABC recognizes the causal relationship of cost drivers to activities. ABC techniques enable a business to decide which products, services, and resources are increasing their profitability, and which are contributing to losses.
Certain organizations appear to be more successful in implementing ABC than others. ABC helps the managers in these organizations to make the right decisions regarding product mix, pricing, process improvements
1. Outline of chosen Hong Kong company………..…….……………….P.3
2. Characteristics of an organization contributing to the use of activity based techniques ………………………………………………………….……P.4-5
3. An appropriate ABM example in chosen company……......................................................................................P.6-8
4. How the ABM information can be used by managers………………….……………………………………...……….P.9
5. Problem causing an organization to decide not to use or to abandon use of activity based techniques…………………………………………P.10-P.11
6. Reference List……………………………………………….…………………..……P.12
Luen Yick Electrical Mfg Co., Ltd.
Since 1968, the group has been a manufacturer of electrical accessories and lighting products with a wide range of furniture and bathroom lights, fluorescent,
energy saving and LED lighting products to the international market. From
product design to final assembly, all production processes are done in-house,
which makes customizing products easy for us.
Number of employees: 201-500
Year Established : 1968
Nature of Business : Manufacturing
Major export markets : Hong Kong
Products / Services: electrical accessories and lighting products
Activity Based Costing (ABC) is a costing methodology used to trace overhead costs directly to cost objects, i.e. products, processes, services, or customers. Costs are assigned to specific activities (e.g. engineering, manufacturing or purchasing) based on their use of resources and costs are assigned to cost objects based on their use of activities. ABC recognizes the causal relationship of cost drivers to activities. ABC techniques enable a business to decide which products, services, and resources are increasing their profitability, and which are contributing to losses.
Certain organizations appear to be more successful in implementing ABC than others. ABC helps the managers in these organizations to make the right decisions regarding product mix, pricing, process improvements