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Activity Based Costing Assignment Help

Assignment Hut inspires the students to carry on the path of learning. We are here to share the knowledge of our expert’s team to the students who get stuck with their homework problem or who want to have in-depth knowledge of the subject matter to complete their assignment. We are representing here the explicatory knowledge about the Activity Based Costing.

In a business organization, Activity-Based Costing is a method of assigning the organization’s resource costs through activities to the products and services provide to its customers. It is a method of cost allocation to cost units based on benefits received from activities which are not direct in nature, e.g. ordering, setting up, and assuring quality.

Activity-Based Costing identifies of costs with cost driving activity and makes it basis of allocation of costs over different products or jobs.
It is basically used for apportionment of overheads costs in an organization having products that differ in volume and complexity of production. Under this technique, overhead costs are identified with specific activities which act as a cost driver i.e the cause of incurrence of overhead cost.

Such cost drivers may be purchase orders issued, quality inspections, maintenance requests, material receipts, inventory movements, power consumed, machine time etc.

Activity-Based Costing has supports strategic decisions such as pricing of the goods and services, outsourcing activities etc
Activity-Based Costing principles are used (i) to focus management attention to the total cost to produce or service, and (ii) as the basis for covering total costs. Support services are suitable for ABC as they produce specific units of output.

Activity-Based Costing helps managers to analyze which activities are value added services which will provide maximum end user satisfaction and achieves the organizations objectives. It improves decision-making by means of effective cost information.

Assignment and Homework help For Activity based accounting at Assignment Hut

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