Abc Costing System

The ABC belling system and customer sustaining Introduction During the eighties the terminal point of conventional product make up began to be widely publicized. These systems were desgined decades ago when most companies marketed a narrow range of products. Indirect cost were relatively sm whole, and the distortion arising from impertinent overhead eitherocation was not significant. Information processing cost were high and it was therefore strong to justify for educate methods of depute indirect be to the cost objects. And gradually take on ways to know the customer demand, and how to heavyset in the affinity with the loyal and profitable customer. By the eighties companies were marketing a wide range of products, indirect costs were no lasting relatively unimportant and information costs had ceased to be a barrier to introducing more cultivate systems. From other side memory the relationship with the customer would be very much less(prenominal) costly than t rying to make a in the burnish one every time. Furthermore, the intense global competition of the mid-eighties resulted in decision errors from poor cost information reasonable more and more costly. It is against this underpinground that a new, and more sophisticated cost systems, called activity- base costing (ABC) emerged in the late 1980s.

Here argon we going to study and analyze this method, and see if it fits and work for all companies or not, and what we think of it. Aim of work The aim of the model is to find out if the new costing method, activity found costing (ABC), is developed and has been advocated as a means of overcoming the arro! gant distortions of traditional cost accounting and for bringing relevance back to managerial accounting. And it would help the organizations to soundly estimate the cost elements of stainless products and services, and to last gain customer sustaining. Method   Activity based costing method assigns an organization`s resources costs by dint of activities to the products and services...If you penury to get a full essay, order it on our website: OrderCustomPaper.com

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