Posts Tagged ‘customer profitability’

Activity-Based Cost: Three Reasons To Avoid It

Activity-Based Cost or ABC has proven itself to be superior over traditional costing methods. Most traditional methods evolved during the early industrial age when life, while more complex than an agrarian culture, was simple. The introduction of computers and modern data processing triggered the rise of ABC giving people the power to manage data driven […]

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Unravel Customer From Product Relationships

I follow several discussion threads on Linked In. Recently, someone asked how to allocate the cost to acquire customers to products. While several responses had suggestions, I think there is a larger issue that is often missed.


The Problem With Absorption Costing

In a recent forum, a member posted the following question: “Absorption Costing may not be the best approach for product costing. For example, why isn’t a cost of capital or return on assets incorporated into costing rates?”


Don’t Wait for a Crisis to Manage Costs

I would like to take issue with a couple of common sayings: “Don’t rock the boat” and “If it ain’t broke, don’t fix it”. The common understanding of these are that when things are going well, let them continue. While there is a time and a place for not intervening and letting the process run, […]


Driving by Looking in the Rearview Mirror

Over the years, while listening to various experts in different business management methodologies, I’ve often heard this driving analogy. “You would not drive a car by looking in the rearview mirror”. In fact, I’ve probably used this analogy myself.


‘Tis the Season – Budget 2011, But Make Sure You’re Ready with Plan B

Below this article, please read my comments also… 2010 is coming to a close, and its time to get serious about having your 2011 plan in place. And I’m not just talking about a revenue target or a net income budget. You can do so much better than that, and you’ll be surprised how much […]