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Activity-Based Costing in SAP R/3 System

Many firms in emerging economies invest in Information Technology for manipulating the accurate cost of product in minimum time. The primary objective of automating the gathering of actual financial and operational data into a comprehensive, applied business model is to evaluate the true cost of objects (products, processes, services or customers).

An Enterprise Resource Planning (ERP) system such as SAP R/3 integrates the data models with the actual operations and provides analytical discipline to evaluate information for management decision-making. The software package based on this Activity-Based Costing (ABC) methodology is developed for generating accurate cost information for decision support and management control. Reliable product cost information is considered as a powerful tool in increasing a company’s profitability and competitiveness.

This project examines an approach of implementing the integrated information system of Activity-Based Costing in SAP R/3 environment by allowing the creation of a costing system that provides decision-makers with up-to-date, complete and reliable cost information.

            This project has been successfully implemented in the Costing Systems and Printing Department of PRICOL Limited.  After analyzing the various opertions, the necessary data are scrutinized for evaluating the actual cost of dial. Transaction screens were prepared for both Single dial and Family dial using ABAP/4 language in SAP system. The inputs are stored as records in the database table so that the duplication of data is completely eliminated. These records can be retrieved from the database table for future analysis.

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