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Accounting and Finance Assignment - (Sample)

   

Added on  2021-04-16

9 Pages1591 Words55 Views
Running head: ACCOUNTING AND FINANCEAccounting and FinanceName of the StudentName of the UniversityAuthor’s Note

1ACCOUNTING AND FINANCETable of ContentsOrganizational Context....................................................................................................................2Explanation of the Calculation........................................................................................................2Discussion on Limitations...............................................................................................................6Discussion on Usefulness for Decision-making..............................................................................6References........................................................................................................................................8

2ACCOUNTING AND FINANCEOrganizational ContextCosting is considered as an integral part of the accounting of the companies as it helps inthe determination of the cost of products or services so that desired profit can be obtained. Thereare many costing methods available for the companies like Traditional Costing, Activity BasedCosting (ABC) and others. Among all these costing methods, the popularity of ABC can be seendue to its simplicity in determining the cost of an individual product (Drury 2013). Explanation of the CalculationThe following discussion shows the calculation of the cost of an individual product byusing ABC model.Step 1In the process of ABC, five major steps can be seen for the calculation of the calculationof an individual product or service; and all these stages are interconnected among each other.First step involves in the identification of the major activities having major impact on theoverhead costs of the product. In this particular case, the five major activities are Purchase ofMaterials, Setting of Machines, Running Cost of Machines, Assembling Cost of Products andInspection Cost of Finishes Products (Fleischman and Parker 2017). Step 2In this particular step, the identified activities of first step are assigned to the activities.The following table shows the amounts allocated against each activity. Thus, from this step, the

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