Question

Under what circumstances might the activity-based costing method provide more accurate product costs than the multiple production department factory overhead method? When might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products? 
How can activity-based costing be used in service companies? 250 words minimum

Answer 1

cs Helplines 209 6005 in pwe.com Activity -bated costing is about cost Management This is reducing auld controlling cast while stila create a quality product. Activity bared corting CABC) allows managers to identify a how various cort objects au ning resources differently and to highlight area for continous improvement the literature on Abc focuses mainly on its use in manfacture Setting because it has been to succciful in that alea. This article discussel ABC we in service sector. Applying ABC in service sector service companies have had problems coming up with decent Cost accounting system becaul s they have been modeling them aftu Lysten Found in manufacturing #rm. The problem with this area that manufactuins fim place emphau'r on valuing inventory, which senice firma do not have and use standard colts calculated for direct Marial and Labour - Direct Material and direct Labour are not mafor cost categories in service firm and a it hard to calculate standard cost i lategories in service setting. Nonetheless, service from do need to know acculate cost for Product profitability avalysis. TTTTTTTeen

Diversity and inclusion matters They need to find out: # which product are profitable Which product should be emphalized Trendi eu prodirct sofitability over time # product cost as a basis for setting price & Treudi en proana This meane that cortina in service ector needs to be Forwould looking and Abe et a tool for such analyn's Trile are several service industries when Abc hal started to emerge and will continue to prove wefull.