FACTORS PROMPTING THE DEVELOPMENT OF ABC

 Factors prompting the development of ABC

Various factors lead to the development of ABC include:

1. Growing overhead costs because of increasingly automated production

2. Increasing market competition which necessitated more accurate product costs.

3. Increasing product diversity to secure economies of scope & increased market share.

4. Decreasing costs of information processing because of continual improve- ments and increasing application of information technology.