Buy custom ABC- activity based costing
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Topic: |
Business
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Number of pages / Number of words: |
9 / 2336 |
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In ABC, a measure of the relevant activity volume is used to trace each type of costs, rather than exclusively using measurements (or allocation bases) related to the volume of the products or services produced. Using this logic, ABC tends to solve the problems created by traditional cost or inventory valuation methods...
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Using this logic, ABC tends to solve the problems created by traditional cost or inventory valuation methods.
Example: the difference between product costs when using Traditional and ABC
Company A manufactures two products:
Product H - a high volume product, and
Product L - a low volume product.
Information regarding the production and costs of activities is as follows:
Product L Product H
Machine hours per unit 2 2
Labour hours per unit 4 4
Annual output (units) 1 000 10 000
Total machine hours 2 000 20 000
Total labour hours 4 000 40 000
No...
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General points of the essay
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