Activity Based Costing In Kfc

One of the management accounting approaches that can be used to measure and analyse the environmental and social impacts is using Activity-based costing (ABC). Activity-based costing (ABC) is a management accounting approach to assign overhead cost to activities based on their resources usage (John Spacey, 2016). Nowadays, most companies are using activity based costing, (ABC) to identify and measuring the direct and indirect environmental costs. Before assigned the cost to each product and service on the basis of each activity consumption, normally ABC technique will recognize each activity cost during the process of production (Drury, 2012). It permits more direct costs to be assigned so it leads to less overhead cost (FSN, 2006).

Activity-based

For example, KFC Corporation, the world's largest chain of fast food chicken restaurants in the world, uses Sustainability Balanced Scorecard for their business. For the financial perspective, KFC concern for firm growth and profitability as the annual sales growth of at least 5% every year and net profitability improvements of 2-3 % (Company owl, n.d.). From the customer’s perspective, KFC crea tes value, satisfaction and support to customer. KFC stands for Kentucky Fried Chicken strengthen the nutritional profile of their menu items by make progress in serving more menu items that provide packages of veggie products into its product range in INDIA while covering the factor of ethnicity (Company owl, n.d.). Besides, KFC has re-launched its grilled chicken menu in US, which aimed at satisfying consumers’ needs for health and convenience. Hence, from the customer perspective, customers who are concerning for healthier meal for their families would appreciate the effort of the company and loyal to the company by giving feedbacks and supporting them. Whereas for internal business process perspective, KFC concern for efficiency and waste reduction. The cost of production the dropping by 4-5 % annually (Jenny, 2012). For learning growth perspective, KFC concern for innovation and employee’s satisfaction. Balanced scorecard is a great tool that can reduce the employees’ turnover. The employee attrition drop by 10% annually. KFC motivate Team Members to increase the Speed of Service. KFC also provide employees training in order to serve customer better make those individual customers happy. From the case above, it clearly indicated that KFC not only focused the profitability of the company, but it also concerns about the people that work with them and the customer’s