Cost Essay

Cost Allocation & Activity-based Costing Due: November 15, 2009 Executive compend Due to the changes in the accounting practices, activity-based cost is replacing the stodgy accounting practices at a rapid pace. Activity-based costing focuses on allocating overhead be to the proper product, go, and/or department. This is accomplished by analyzing be to beam the extinct of the usage. Activity-based costing is becoming prevalent due to ball-shaped competition, technology changes, and the downfall of the thriftiness. The listed tends argon forcing companies to bugger off a post and regroup all be and expenses for a such(prenominal) more than profitable outcome. Activity-based costing champions with the profitability of the smart set by evaluating and identifying wasteful and unnecessary expenses. Activity-based costing also provides much more dead-on(prenominal) information for proper decision making, as unlike to the traditional accounting practices. Costs Drastic changes in the economy have strained many companies and organizations to change its accounting practices and procedures. conventional accounting procedures atomic number 18 being replaced to help companies regroup be and profit margins. Companies are starting to apprehend the values of cost allocation and the activity-based costing method.

Activity-based costing (ABC) focuses on the costs that are required to arrive at a product or service. Companies that produce more than wiz service or product have common or divided up costs and resources within departments. Departments are faced with verificatory costs due to the shared resource s. The process of assigning mediate costs! is known as cost allocation. Companies allocate costs to products, services, and departments for quadruplet major reasons: (1) to provide information needed to grant allow decisions, (2) to reduce the frivolous use of common resources, (3) to upgrade managers to measure the efficiency of internally provided services and (4) to calculate the full...If you sine qua non to reach a full essay, order it on our website: OrderEssay.net

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