Case Sanac

Abstract

The Sanac Case provides an excellent introduction to Time-Driven Activity-Based Costing. The case is based on a real Belgian company that struggled with the implementation of Activity-based Costing and soon discovered that the time-driven approach could better cope with differences in terms of services and logistics among the orders and customers than an ABC model. The wide diversity in the use of resources by the various customers made it difficult to trace and analyze costs in ABC, based on rates per activity driver. The case can be used to: - demonstrate the weaknesses of ABC in complex and dynamic environments; - illustrate the benefits of Time-Driven ABC as a tool for providing order and customer profitability information in complex and dynamic environments; - explain the concept of time-drivers in Time-Driven ABC.