Social enterprise development: implications from activity-based costing

The case study examines the impacts from integrating activity-based costing (ABC) for the coop's cost management. It operated in the milk industry, which was regulated with price control. Its main challenge was to meet the local municipality's demands for school consumption. Most of the coop's revenue came from the fixed-price contract with the local municipality. In addition, environmental regulations and business uncertainty during the COVID-19 pandemic motivated the coop to explore ABC as a pilot for cost management. Many issues and shortcomings were discovered. For instance, the environmental cost needs to be directly part of production (instead of the cost of supporting production) to ensure the accuracy and usefulness of the unit cost of the coop's products. Cost drivers were also identified. Many implications relating to the coop's operations and ABC's implementation on enterprise development and learning are discussed such as the importance of technology and workplace learning.