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Activity Based Costing
Beginning of essay
In today's competitive economy, the cost structure is much more complex than that of the past, and there is a lot less room for error than that allowed in the more laid back economy of the past. Today's costing concerns arise from the growing disparity between direct and indirect product costs. ....
Middle of essay
....oduct's demand for some volume variable direct cost, usually labor hours, machine hours, or materials cost. But none of these bases individually represents the actual overhead incurred to make the product. Conventional thinking holds that the inaccuracy is not relevant because in total all costs are accounted for, and on average the relative distortion in margin reporting can not be significant.
, by contrast, identifies what activities are performed by the overhead organization and calculates.... |
| Number of words: 820 |
Approximate pages: 3 |
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