Managers Decide
ABC and Dairy Product
ABC has been used to analyz the profitability of products in the dairy case of food retailers.
Milk was found to be the most profitable item,taking up just 23 percent of the space in the dairy case yet providing 25 percent of the revenues and 34 percent of the profits. The activity based unit cost for dairy items was calculated using distribution activities,handling activities,space,and time on the shelt.