Activity Based Costing Homework Answers

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Activity Based Costing Assignment Answers

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A constituent of accounting method, activity based costing identifies the correlation between the three components namely cost, activity and product. It functions in providing indirect costs to products more efficiently in comparison to that of traditional methods. It helps in analysis of profitability of a product apart from helping in target costing as well as product costing. Students often remain in ardent need of Activity Based Costing homework answers for a better understanding of the ways to assign a cost to activities.

Introduction to Activity Based Costing

It is a logical way to assign a cost to products. Activity Based Costing requires special engineering. Apart from that it also recognizes special testing and machine setup. Due to its extremely well results in cost management and production, its significance has grown to new heights.

Applications of Activity Based Costing- ABC the abbreviated form of Activity Based Costing finds better applicability in comparison to the traditional methods of costing. Activity Based Costing is an important method to reduce cost by assisting proper management. It is generally applied by building a model. The main approaches ABC makes are-

  • It helps in recognizing incapable products
  • It helps in assigning prices to more profitable activities
  • It reduces inefficient and useless costs
  • It also helps in managing the cost of products
  • It helps to maintain stocks

The problem area

In addition to numerous advantages, Activity Based Costing also involves a few demerits like-

  • Cost tracing problem

At times it becomes hard to trace the costs and to assign the activity at the correct cost.

  • Lengthy installation time

The process takes longer than what it should set up. Correct implementation of different activities with respective cost takes time to install.

  • Overpriced method

It also requires an over the size set up for accurate analysis of the results. The charges are usually high in this regard.

  • Data sources from multiple departments

Implementation of Activity Based Costing requires data from different sources.

The practical usage of this method is of great use and requires better information. This situation of crisis makes students reaching out for a helping hand. Out of the many web portals that are designed to deliver quality results in this field, is one of the best to deliver Activity Based Costing assignment answers.

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