G. Value Added Versus Non-Value Added Activities. 1. Value-added activities increase 3. Value-added activities are 4. Non-value-added activities are 5. Companies often use activity flowcharts to help 6. Not all non-value-added activities are totally wasteful, nor can they be totally eliminated, but managers are motivated to H. The Limitations and When to Use ABC. The limitations of ABC are: 1. a. b. 2. The presence of the following factors would point to ABC's possible use. a. b. c. d. e. I. Activity-Based Costing in Service Industries. 1. The overall objective of ABC in service firms is no different than it is for a manufacturing company: The objective is to identify 2. The general approach to identifying activities, activity cost pools, and cost drivers is the same for and 3. Often, a larger proportion of overhead costs are that cannot be directly traced to specific services provided by the company, which sometimes makes implementation of ABC