Abstract Title: The Future of ABC at Sandvik Tooling – Incorporating ABC with information systems in order to drive business development from a cost point of view. Authors: Jenny Andersson and Camilla Salomonsson. Supervisor: Charlotta Johnsson – Department of Automatic Control, Lund University. Carl-Henric Nilsson – Department of Business Administration, Lund University. Mats Jacobsson – Tooling Supply Finance, Sandvik Tooling. Core Issue: Many companies have not been successful with their implementation of the ABC model. The number of companies using the ABC model for allocating overhead cost is still low. Companies who once used the ABC model have abandoned it. The ABC model has also been accused of not capturing the complexity within a company, causing information system, and other information systems such as Excel, to exceed their capacity. Purpose: The purpose of this thesis is to examine how a company based ABC model corresponds with the theoretical model, in order to give feedback to theory from a practical case and vice versa. The relationship between ABC models and information systems will also be evaluated in order to find means to optimize the link between them. Points for evaluating information systems from an ABC point of view will be presented. Methodology: An abductive approach and a qualitative method have been used for this study. Information has mainly been gathered through interviews in order to build the empirical chapter. Secondary sources such as academic articles have been used for the theoretical framework. Conclusions: A conclusion we have drawn is that complexity is a villain when it comes to designing ABC models and the relating information systems. The compatibility of Sandvik Tooling’s information systems in terms of ABC is deemed as inadequate. We recommend the development of an ABC module to the existing information systems. In order to make it possible to develop/design and implement system supporting ABC, standardization of the terminology, as well as parts of the calculation making up the standard cost, is necessary. Keywords: Activity Based Costing, ABC, Cost Allocation Process, Overhead Cost, Sandvik Tooling, Information System, Transactions
