Design and Usage of Activity-Based Costing in a Trading Company

Abstract: Background: The Activity-Based Costing model has its origin in the Manufacturing Industry and has since its origin become more usual. The ABC-method is beginning to break through in several others businesses than just the Manufacturing Industry, but there are insufficient information about how the ABC-model can be developed in Trading Company for instance. These companies often use simple and stereotyped calculations in their organizations and assume the cost price by calculating, which give rise to an inappropriate allocation of the costs. ABC could therefore be a solution to these problems and therefore would it be interesting to investigate how this model can be designed in a trading company. Purpose: The purpose of this paper is to describe the design and usage of the Activity-Based Costing in a Trading Company. Method: The paper has a sign of a case study. A more deep study has also been made at Materialservice in Nässjö, while the study at ICA, Hall.miba and Svenskt Papper has been of a more supplementary nature. We have also made interviews with two firms of consultants, Prodacapo and SAM in purpose to make our study/investigation more general. Result: We have found that the result the customer has a more important role in the Trading Company than the Manufacturing Industry and that the Trading Company use more activities and cost drivers in their ABC-model. The result also shows that the main area of use of ABC in the trading company is to guide the behaviours of the company and the customers.