Suppose you were asked to determine a method to compute the operational costs of a company’s ERP (Enterprise Resource Planning) system. determine whether you would apply the Activity-based costing (ABC) model or a different model to calculate the costs. Support your rationale. Examine the risks and benefits of applying the model you chose.
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I will use the ABC method since it assigns the cost of each activity in a firm to all products. this helps to eliminate the unprofitable items thus leading to profits .The risk is that the method is complex and time consuming and this requires an expert to analysis.
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