Management Accounting: Costing Analysis for Innovation Ltd ACC/ACF2200

This report provides a detailed analysis of costing methods applicable to Innovation Ltd, a tea-based product manufacturer. It begins by classifying costs based on nature, cost center, function, behavior, and production type. The report then explores various costing techniques, including hybrid costing, job costing, process costing, and Time-Driven Activity-Based Costing (ABC). It highlights the benefits and drawbacks of each method, ultimately recommending Time-Driven ABC for Innovation Ltd due to its simplicity and effectiveness in identifying costs and improving profitability. The report also illustrates how Time-Driven ABC can be used to analyze and report costs in the customer service department, demonstrating the difference between capacity supplied and capacity consumed. Finally, it discusses how the company's seniors can easily make changes in the operating conditions by updating the time driven model.