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Activity based costing system basics


    For performing, an Activity-Based Accounting Assignment one need to identify what activity is based costing. It is an accounting process utilised in identifying activities of a firm. It identifies the relation between products, costs and activities. For doing an activity based accounting assignment one can get best help from Bestassignmentexperts.com . For writing an activity-based accounting assignment, one must know cost of product. This is the sum of costs of activities needed to supply and manufacture those to customers.

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  • The main purpose of the activity-based costing is to decide costs, which reflect physical vibrant of business .
  • Activities are consumed by products/services .
  • Direct cost related to production cannot be found.
  • It provides ways to assign costs of the indirect support sources to activities.

Usefulness of the Activity-based costing method

According to our accounting assignment experts, the practice of the activity based costing is mainly important to business that provides customized products and the services.

Functioning and plan of Activity-based Costing system

While dealing with Activity Based Costing Assignment, one needs to gather knowledge about the execution of system in business efficiently. The procedure of implementation is explained as follows-Determining the Cost Objects, Recognizing Direct Costs, Finalizing cost allocations bases, Determining overhead costs, Calculating the rate per unit, Computing the overhead cost for allocating to products and Figuring cost of products.

Difficulties in implementing activity based costing system

    Our online Activity based Assignment states a few challenges that is faced by the students:

  • The former plans should be approved by the higher management team, which involves inquiring from the employees.
  • A cross-functional team of technicians take care of the implementation and design of the activity based costing system.

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