Maddox Smith Staff asked 5 years ago

Traditional Responsibilities

One of the traditional responsibilities of the management accountant is to provide cost information. Activity-based costing (ABC) is the process of allocating costs incurred in supplying the product or service based on the amount of activity required to produce it. a) Calculate the profitability of the three products (including a total of all three) using an activity-based costing approach. Show all workings. b) Analyse and explain the differences between the current costing approach and the ABC approach for each product. (max 500 words) c) Based on relevant research (max 1500 words): i. Identify and explain key practical issues that need to be discussed and considered prior to any implementation of an ABC approach applicable to this company. ii. Summarise how the ABC information may be used to improve managerial decision-making (activity-based management (ABM)).