You have just taken a job at a manufacturing company and have discovered that they use...

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Finance

You have just taken a job at a manufacturing company and havediscovered that they use one predetermined overhead rate to applymanufacturing overhead costs. You would like to introduce them toactivity based costing and explain to them why this costing methodcan be used and why it is helpful.
Compose a short email - 2 to 3 short paragraphs because thepresident it too busy to read anything longer than that - proposingan activity based costing system and what that might mean forproduct costs and management decisions. You could give a briefexample if you feel that is necessary for your explanation to thepresident.

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Activitybased costing ABC is an accounting method that identifies and assigns costs to overhead activities and then assigns those costs to products An activitybased costing ABC system recognizes the relationship between costs overhead activities and manufactured products and through this relationship it assigns indirect costs See Answer

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