Problem -
ABC in Service Industries (Excerpted from 'Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance.' Harvard Business School Publishing. After reading the excerpt, select a current company that provides 'services' (hotel, airline, restaurant, travel/leisure) and identify how that company can apply ABC processes to its services. Write a 3-page paper and include the following:
Description of Company, including the type of service(s), the company provides.
What companies are either direct or indirect competitors of your firm?
Specify what service(s) would benefit from ABC process costing.
What challenges would the company need to overcome to make ABC process costing successful?
What advantages would the company have over its competitors if it utilized ABC processing?
Finally, what additional costs would the company need to absorb and how would it include those costs without a significant decline in operating profits?