Finance Assignment: Costing Methods for Non-profits and Outsourcing

This finance assignment explores appropriate costing methods for non-profit organizations and outsourcing. It begins by defining responsibility accounting and advocating for Activity-Based Costing (ABC) as the most suitable method for non-profits, emphasizing its ability to accurately allocate costs based on organizational activities and processes, which can be more precise than traditional methods. The assignment then examines the benefits of should-costing for companies involved in outsourcing, highlighting how it supports technological adjustments, competitive advantages, and consumer satisfaction. The analysis emphasizes how costing methods help in analyzing and tracking outsourced products, ultimately aiding in determining the final cost of a product. The assignment also references relevant literature to support its claims.

Running head: FINANCE
Finance
Name of the Student:
Name of the University:
Author Note:

1FINANCE
What costing method do you think is appropriate for Non-profit
organizations?
CIMA, London, defined responsibility accounting as a structure of managing of
recording accounts transaction in order to establish accountability as per the delegation of
responsibilities for different levels of managing along with the information related to
management. Also, the system of reporting instituted in order to give appropriate feed-back
relating to the delegated responsibilities. The appropriate method for costing for the non-profit
organization is ABC Costing as ABC costing is explained as a costing method that recognizes
the activities of an organization along with allocating the incidental resources to every actions
that is done in order to complete the manufacture of goods along with facilities. It narrates
indirect price to the deeds that ambition them to be acquired. Measuring of ABC is based on
costs along with gains of an organizations constructed on the activities those are performed
inside the organizations. Activity-Based Costing procedures the charges and proceeds of an
organization grounded on the actions accomplished within that organization. By concentrating on
procedures that donate to proceeds and commercial processes, ABC can exactly regulate how
each procedure narrates back to exact harvests, clienteles, or facilities. This can brand a vast
change after in view of granary, sales, client service, supervision and other expenses that are
often practical at a regular rate, if at all. With ABC, the organization can tool into productivity,
recital, and any supplementary influence. (Oseifuah, 2014).

2FINANCE
Can you offer any thoughts on why Should-costing is better for companies
involved in outsourcing?
Requirement of adjusting technology with the technical changes for sustaining along with
gaining a competitive advantage, making high investments, increasing the level of productivity
with the flexibility of sales is met by through the costing method. This also helps in product
height and weight as well as the size of line. Managing sales along with managing sales services.
For this reason, overhead cost rises specifically in providing support actions. The broad distinct
between products, groups of consumers, line of product, market and many more in order to
absorption of some actions. Smooth running of business and getting success in the recent times
competition the primary prioritizing is given to gaining consumers satisfaction. For satisfying
consumers the company focuses on delivering product and services at the best lower rate. The
cost also rely upon the cost drivers. (Aguezzoul, 2014). For this, costing approach has grouped
certain cost drivers in order to arrive at the accurate cost. Cutting down the cost of the product
can be done through reduction in manufacturing cost. This can be done if appropriate cost is
added for the product. Costing helps in allocating the cost of materials and other factors that are
being utilized for manufacturing a product. The costing method helps the company to analyze
and keeps the track of the products that are being out sourced. The final costing of a product and
be allocated with the help of analyzing the cost sheet of the products that are being produced.
(Kaličanin, and Knežević, 2013).

3FINANCE
Reference:
Aguezzoul, A., 2014. Third-party logistics selection problem: A literature review on criteria and
methods. Omega, 49, pp.69-78.
Kaličanin, Đ. and Knežević, V., 2013. Activity-based costing as an information basis for an
efficient strategic management process. Economic Annals, 58(197), pp.95-119.
Kapić, J., 2014. ACTIVITY BASED COSTING-ABC. Business Consultant/Poslovni
Konsultant, 6(32).
Oseifuah, E.K., 2014. Activity based costing (ABC) in the public sector: Benefits and
challenges. Problems and Perspectives in Management, 12(4), pp.581-588.