ACTIVITY-BASED COSTING (ABC) IN SERVICE INDUSTRIES 1
Activity-Based Costing (ABC) in Service Industries
Abraham B. Morris
Professor Peter McDanels
ACC560: Managerial Accounting
April 27, 2015
ACTIVITY-BASED COSTING (ABC) IN SERVICE INDUSTRIES 2
According to Robert Kaplan, activity based costing (ABC) is a system that “provides the
conceptual framework for linking financial, production, scheduling, order-entry, marketing, and
sales data into a comprehensive costing and profitability model that reports profitability by
individual product, customer, and even by order,” (Kaplan, 2009). With regard to time driven
ABC the methodology has even been driven further to and simplified to make it even more
powerful in measuring the effectiveness of financial aspects of a company. This paper brings to
the attention of an implementation of TDABC to ease, effectiveness of this accounting tool.
My choice of company is H&R Block. It is an old company and one of the largest in the
tax service provider industry. The company was founded in 1955 by Henry and Richard Bloch,
who are brothers. It consists of more than 100,000 trained tax professionals within the US and
