The ABC Method – Proposed Implementation in a Structural Steel Industry

Nowadays there are a large variety of contributions in the area of costing systems describing a lot of different possibilities. The difficulty lies in choosing the best one for each company. As a matter of fact each company is different from another and it is necessary to “look inside” each one and understand very clearly how their costing structures function. Know where company’s costs lie is the best way to reduce them and to determine the correct price of the product. It is thus essential that the company may have a good costing system that will allow it to possess the highest level of information and will be a support to the decision making process. From among all the new approaches, this paper will analyze the costing system based on Activities (ABC). Its objective is to understand the application of ABC as a costing system and to classify implementation methodologies. The ABC costing system was implemented in Martifer Construções, a Portuguese industrial company that manufactures metallic structures, as an alternative method. Work took place within company production facilities and a check has been carried out of costing problem details and the company’s expenses system. The purpose of this study is to validate the ABC method in this company, to provide a tool to support work and to reach a conclusion about the real advantages and disadvantages of implementing this method. This study will help leaders and managers of the company to make decisions about implementation of the method, as well as helping to increase knowledge of the matter, providing a useful tool to the company