Term
| 3 approaches to distribution channel profitability |
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Definition
1. Standard costs
2. ABC
3. Strategic cost management |
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Term
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Definition
| Creates 2 cost pools, product costs and SGA. Product costs allocated on stadard cost units and SGA based on sales. |
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Term
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Definition
Advantage: ACCURACY
Drawback: based on the assumption that ll costs are product driven. |
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Term
| 3. Strategic cost management |
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Definition
| recognizes cost is not solely based on products, also on the customers and markets. Removes the constraint that everything has to be product-driven |
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Term
| Developing accurate channel and customer costs (4 steps) |
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Definition
1. Separate costs into activity and non activity
2. Identify the cost behavior of all activity and non-activity costs (channel, product and customer).
3. Trace costs to individual products, channels and customers
4. Translate the product, channel and customer costs into a total cost view for the whole business.
3. |
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