Often the most difficult part of computing accurate unit costs is determining the proper amount of overhead cost to assign to each product, service, or job. Unlike direct materials and direct labor costs which can usually be easily traced to the product, overhead is an indirect or common cost that generally cannot be traced.

Companies that continue to use plant wide predetermined overhead rates based on direct labor or machine hours, where the correlation with overhead no longer exists, experience significant product cost distortions.

EPIC Consultants Inc. can help you develop an Activity Base Costing System in your organization. ABC is extremely valuable to an organization, because it provides information on the range, cost and consumption of operating activities. Specific benefits of and strategic use for this information are:

More accurate product costs enable better strategic decisions regarding:

• Product pricing
• Product mix
• Make vs. Buy
• Investments in R&D, Process automation, etc..

Increased visibility of the activities performed enables a company to:

• Focus more on the management of activities, such as improving the efficiency of high cost activities.
• Identify and reduce non-value added activities.

E-proms is a very powerful software that allows your company to track step by step all the activities in your process. Through E-proms we are able to document the time spend on each activity and automatically calculate the total cost of each product.

E-proms provides the shop floor control required to support an accurate ABC System.