Question: 4 - 3 4 ABC and Cost Management SystemsCost management systems have three primary purposes. Two of these are providing information for strategic and operational

4 - 34

ABC and Cost Management SystemsCost management systems have three primary purposes. Two of these are providing information for strategic and operational purposes. Companies often adopt ABC systems to increase the accuracy of cost information used by managers for strategic and operational decisions. Suppose a company produces only one product.This means that

100 %

of its costs are direct with respect to the product costobject

.

The accurate product unit cost is simply all costs incurred divided by the total units produced.Might this company be interested in an ABC system? Why or why not?

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