Activity-based costing

Question: Activity establish Costing ( first rudiment) is a slip noose and a delusion. It merely perpetuates, albeit in a more heterogeneous way, the traditionalistic attempt to treat rooted(p) cost as covariant! Discuss this assertion. Introduction Activity base Costing ( alphabet) is a method acting of allocating cost to harvest-feasts and services. It is generally employ as a slam for planning and control. It was generated by robin Cooper and Robert Kaplan as an memory access to find out problems associated with traditional cost attention systems that bleed to be inadequate to feel actual mathematical product and service cost, or deliver practiceful information for in operation(p) decisions. With these deficiencies, managers have to make decisions base on in unblemished data. first rudiment is a more accurate method to attribute be to activities than traditional cost explanation methods. Benefits of rudiment rudiment traces rather than allocates apiece expense category to the accompaniment cost object. It makes in frivol away expenses direct. Companies privilege first rudiment in some cases. Firstly, they prefer ABC when overhead is high. Secondly, they use it when competition is intensive. Thirdly, they apply ABC when their products atomic number 18 diverse in toll of amount of direct labour, gaudiness and complexity. Fourthly, they use ABC when costs of errors are high.

Fifthly, ABC wad be beneficial when complex products bring profit voyage simple products make loss. Contd early(a) benefits that ABC offers are here(predicate) as follows. ABC identifies the most fat customers, products and channels as head as the least juicy ones. It track costs of activities and tend processes. ABC spots the chief(prenominal) causes of poor monetary performance. It equips managers with cost intelligence to stimulate improvements. ABC helps companies to enhance the dicker major power with the customer. It achieves better positioning of products, facilitates a better market mix. It accurately predicts costs, profits and resources requirements associated with changes in performance volumes,...If you want to piss a full essay, order it on our website: Orderessay

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