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

Preparation of comparative balance sheet, Problem From the following ba...

Problem From the following balance sheets of Dramas Ltd., compute the trend percentages using 31st December 2005 as the base year. Assets & Liabilities

Managerial accounting, I need help with a solution in the Cornerstones of F...

I need help with a solution in the Cornerstones of Financial and Managerial Accounting textbook, Chapter 11, problem 11-51B on page 578. I need to create a statement of cash flows

Strengths and weakness of net book value and paybac, Strengths and weaknes...

Strengths and weakness of net book value and pay back method

Explain the going rate pricing, Going rate or follow the crowd pricing:- ...

Going rate or follow the crowd pricing:- In this method the firm price its products at the similar level as that of the competition. This method supposes that there will be no

Illustration of short-term decisions, Illustration of short-term decisions ...

Illustration of short-term decisions These are, to a significant extent, determined by the excellence of the firm's long-term decisions. Illustration of short-term decisions in

Pricing over the life cycle of a product, Q. Pricing over the life cycle of...

Q. Pricing over the life cycle of a product? The cycle begins with the invention of the new product. The innovation of a new product and its degeneration to a common product is

Marginal costing technique, how company apply marginal costing techniques s...

how company apply marginal costing techniques show with an example

Industrial Grinders, accepted#Regarding the Overhead costs, these are alloc...

accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;

Lock box system, Lock Box System:   In this type of system, the customers a...

Lock Box System:   In this type of system, the customers are advised to mail their payments to a post office box hired through the firm for collection purposes near their region. T

The break even point in dollorsales for rice company, the break even point ...

the break even point in dollorsales for rice company is48,000 and the company's contribution margin ratio is 40 percent. If Rice Company desires a profit of $84,000, how much wou

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