The ABC method has some detractors - there are some that feel the cost and effort to derive ABC costs outweigh any benefits derived from the information. Over-complex ABC analysis is definitely not necessary. However, some ABC analysis is essential in any business environment that wishes to get a more accurate understading of its product and customer profitability….

Activity-based costing (ABC) is a cost analysis and decision support tool that doesn’t require the use of expensive technology in order to benefit from it. This article recommends conducting a thorough manual ABC analysis before implementing any ABC software.