Activity Based Costing Assignment Help Online
If a person is doing an assignment on activity-based costing then, it is essential for the person to find out what, exactly, activity-based costing is. The method of activity-based costing can be illustrated as an accounting method and it is being possible to make sure that, there is the relationship between costs, activities, and products. If there is any help required regarding activity-based costing then, the assistance can be obtained by the individuals in a proper and appropriate way.
Basics of activity-based costing system
In the course of activity-based costing, it is essential for the person to make sure that he should have knowledge of the cost of the product. This is being identified to be the sum of costs of all the activities which are being required for the purpose of manufacturing a particular product.
· No direct cost in relation to production
· Activities being consumed by products and services
· It identifies the costs by way of tracing of activity based expenses.
· The objective is to ensure that, costs are being assigned so that, physical dynamics of the business are being reflected.
· It helps in providing ways by which costs can be reflected in a proper way for the purpose of doing the tasks.
· Helps in recognition of the resources which are being required by the organization for the purpose of doing the tasks without any kind of issue or trouble arising.
· It helps in fair allocation of overheads
Design and implementation of activity-based costing system
There are certain steps which are required to be taken into consideration in the course of designing and allocation of activity-based costing at a particular point in time in the area of doing the tasks.
Step 1: the first step is to have a determination of cost objects
Step 2: The second step is to ensure that, direct costs are being identified in the area of doing the tasks.
Step 3: The cost allocation basis should be utilized for the purpose of ensuring that, overhead costs are being taken into consideration in a proper way.
Step 4: Determination of overhead costs in relation to selected bases.
Step 5: Calculation of rate per unit.
Step 6: Computation of overhead costs regarding the products.
Step 7: Figuring out the cost of products
The activity-based accounting assignment experts are going to help in the course of finding out the areas in which activity based costing is going to provide help and assistance to the organization.
a. High overheads
b. Product diversity or multiple products
c. Diversity of customers
d. Service diversity
e. Stiff competition
Definition of Activity drive
The activity based assignment experts help in ensuring that, the responsibility of activity drivers are being taken into consideration. The activity driver is being chosen on the basis trade-off between accuracy and cost of management. It is essential to gain detailed knowledge in this area for the purpose of doing the tasks without any kind of trouble or issue arising in the course of doing the working.
a. Unit level activities: These activities include costs regarding direct material, labour and machine maintenance
b. Batch level activities: These are the costs being incurred every time in a group in the course of purchase orders, machine time and others
c. Product line activities: These are the activities which involved assembly of the line. Here, warehousing and other tasks are being considered.
d. Facility support activities: These are the costs which are being taken into consideration in a particular way wherein, these tasks are material in nature.
Acquire and use the material for containers
Acquire and use the material for baby-care products
No. of Containers
No. of products
Set up manually controlled by machines
Set up computers controlled by machines
No. of batches of containers
No. of batches of B. Product
Design and manufacture moulds
Use manually controlled machines
Use computer controlled machines
No. of moulds required
Product type (containers)
Product type (B.Products)
Consider customer opinions
Provide warehousing for customers
No. of consultations
No. of cubic feet
Salaries of the employees
Challenges in Implementation
a. The higher management should ensure that, it is being approving the initial plans in the course of implementation of the tasks which are required to be taken into consideration in the area of doing the activities.
b. Design and implementation based activity costing should work as a cross functional team.
c. The consultant who is being working towards activity based costing should be hired for the purpose of prevention of wastage of resources and time in a proper and appropriate way.
d. There should also be a selection of software regarding activity based costing for the purpose of doing the tasks in a proper and appropriate way so that, best results are being generated.
Indicators regarding the need for activity based costing
It is essential for the organization to have an implementation of activity based costing at the time when, there are the following indicators being present:
a. Direct labour is a small percentage of total costs
b. Product line is profit margin are hard to explain
c. There is the increase in sales and decline in profits
d. There is no support of line managers in the course of product costs being taken into consideration.
e. Market does not make use of cost reports for the purpose of making marketing decisions.
f. Certain products have made reporting of high profit margins.
Limitations of Activity based costing
a. Difficulty in identifying overall activities which have influence over cost
b. It is not easy to make a selection of suitable cost driver
c. Difficulty in in evaluation of the cost on the basis of the activities
d. It is not suitable for small manufacturing concerns
It should be taken into consideration that, a person is being activity based accounting assignment on the basis of theoretical information along with calculations to be taken into consideration.
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