Read the article Yes, ABC Is for Small Business Too” by Douglas T. Hicks, Journal of Accountancy, August 1999. (http://www.journalofaccountancy.com/Issues/1999/Aug/hicks.htm)

Required:

1. According to Hicks, why have small companies avoided ABC?

2. Explain Small Company’s costing system prior to the implementation of ABC.

3. What aspects of Small’s operation suggest that the traditional system might not accurately reflect production costs?

4. Briefly describe the changes that Small s ABC team made in the costing system.

5. What benefits did Small Company experience after implementing ABC?

6. Describe the change in management’s attitude that Hicks noted following ABC.