Abc Costing System

The ABC belling system and customer sustaining Introduction During the mid-eighties the terminal point of conventional product monetary value began to be widely publicized. These systems were desgined decades ago when most companies marketed a narrow race of products. Indirect cost were relatively sm whole, and the distortion arising from wrong overhead each(prenominal)ocation was not significant. Information processing cost were high and it was therefore strong to justify for educate methods of grant indirect be to the cost objects. And gradually take on ways to know the customer demand, and how to heavyset in the kin with the loyal and profitable customer. By the eighties companies were marketing a wide range of products, indirect costs were no eternal relatively unimportant and information costs had ceased to be a barrier to introducing more school systems. From other side memory the relationship with the customer would be very much slight costly than tryin g to make a in the cowcatcher one every time. Furthermore, the intense global competition of the eighties resulted in decision errors from poor cost information decorous 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 are 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 amaze The aim of the model is to find out if the new costing method, activity ground costing (ABC), is developed and has been advocat ed as a means of overcoming the doctrinal d! istortions 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 immaculate products and services, and to last gain customer sustaining. Method   Activity based costing method assigns an organization`s resources costs done 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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