Activity-Based Costing (ABC) Implementation at BMW

Requirements:

1. Implement an ABC system at BMW to allocate costs across its luxury sedan production.

BMW Model	Direct Costs per Unit ($)	Overhead Costs ($)
7 Series	80,000	15,000,000
5 Series	60,000	10,000,000

• Allocate overhead costs using ABC for BMW's 7 Series and 5 Series sedan models.
• Evaluate the benefits of ABC compared to traditional costing methods in improving cost accuracy and decision-making at BMW.
• Recommend cost management strategies based on ABC analysis for BMW's sedan production.