Determine abc system and service organizations, Managerial Accounting

Assignment Help:

ABC System and service organizations

The ABC system has been taken up as applied to a manufacturing organizations with the same efficiency. One basic characteristic of service organization is that most of the costs in these organization are fixed and indirect. On the other hand in manufacturing organization a significant portion of total cost is direct and is easily traced to a cost object. The overhead cost are relatively smaller. However there are service organization which deal in a variety of production and services and incur quite significant overheads. These overhead cannot easily be traced to individual product and service. For example bank provides a variety of services to the customer. Under ABC system the overhead cost of a bank can be allocated to different activities. Some of the activities and the relevant cost drivers for a bank are given hereunder:

Cost assigned to an activity are then allocated to different production and services on the basis of their demand for the activity and the cost driver is used as a measure of resource consumption.

 


Related Discussions:- Determine abc system and service organizations

Decision making, Trinco Ltd (Trinidad & Tobago-T&T) has been negotiating a ...

Trinco Ltd (Trinidad & Tobago-T&T) has been negotiating a contract with a potential customer in Jamaica. Before the negotiations started the Jamaican company agreed to pay $10,000

Determine how the airline company has grown, From the subsequent financial ...

From the subsequent financial data describe: a) How the airline company has grown-up b) How the company has been capable to earn grater margins at higher levels of sales

Accounting concepts, implications of applying accounting concepts wrongly

implications of applying accounting concepts wrongly

Determine the price determination process, Determine the Price determinatio...

Determine the Price determination process 1) Estimating the demand for the product: the first step in determining the price of a new product is to estimation the anticipated

State the important assumptions of break-even analysis, Assumption of break...

Assumption of break even analysis The break even analysis is based upon the following assumptions : 1) All elements of cost, i.e., production , administration and selling di

Difference between budgetary control and standard costing, Difference betwe...

Difference between budgetary control and standard costing Budgetary control The budgets are prepared for the concern as a whole. The budgets are fixed on the basis of p

Accounting , I have two problems due in two hours can you do this for me?

I have two problems due in two hours can you do this for me?

What is activity based management, ABM(Activity based management): ABM ...

ABM(Activity based management): ABM system is primary source of information for AM as a part of ABM identify value added and non-value added activity and management are also to

What are the advantages of standard costing, Advantages of standard costing...

Advantages of standard costing 1) Measuring efficiency: standard costing is a yardstick for measuring efficiency. The comparison of actual costs with standard costs enables t

Define materials cost variance, Define Materials cost variance Material...

Define Materials cost variance Material cost variance (MCV) is the difference between the standard cost of material specified and the actual cost of materials used." It is the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd