Retailers continue to issue "compliance fines" even when orders are late or short because of supply chain problems that are out of companies' control. Backlogs in shipping containers, delays at major ports, and labor shortages in the trucking industry are just a few of the factors that have thrown supply chains into disarray - exacerbated by events such as the flooding in British Columbia late last year. Retailers say they have been making exceptions to compliance fines amid supply chain snags, including Save-On-Foods.

But manufacturers counter that such relief can be hard to come by. They say fines are costing them millions of dollars a year in some cases.

Question: The article indicates that manufacturers say, "fines are costing them millions of dollars a year in some cases." Please explain whether activity-based costing (ABC) would be the recommended method to allocate the cost of fines.If yes Explain why and provide your thoughts on what would be the cost driver(s)? • If no, what would be the alternative costing method, and why would this costing method be preferred over ABC?

Answer rating: 100% (QA)

Yes activitybased costing ABC would be the recommended method to allocate the c... View the full answer