Cost allocation methodology – Activity Based Costing.

For today’s assignment we will discuss the validity of the selection of a cost allocation methodology such as Activity Based Costing and why the choice of allocation method important?

Cost allocation methodology – Activity Based Costing.

Any number of cost allocation methods can be used for shared costs. Generally they have a basis in cause-and-effect, benefits received, fairness, or ability to bear. Discuss the validity of the selection of a cost allocation method such as Activity Based Costing. Why is choice of allocation method important? Cite references. Joint costs are sunk costs at the split-off point, the point in the disassembly process where all joint costs have been incurred. The company can make profit-maximizing decisions (which products to process further and which ones to sell at split-off) without making any joint cost allocations, so why make them? Provide examples and cite references, any number of cost allocation methods can be used for shared costs.

Cost allocation methodology – Activity Based Costing.

Generally they have a basis in cause-and-effect, benefits received, fairness, or ability to bear. Discuss the validity of the selection of a cost allocation methodology such as Activity Based Costing. Why is choice of allocation method important? Why is choice of allocation method important?  Cite references. Choose one of the components of IMC Strategy and explain why it is so valuable in promotional activities. Provide an example that illustrates your position.

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