|
|
This is only a preview of the paper
Click here to register and get the full text.
Existing members click here to login
|
|
|
Activity-based accounting systems can turn many indirect costs into direct costs, costs identified specifically with given cost objectives. ABC systems also turn unallocated costs from non-production functions of the value chain into indirect (allocated) costs. Appropriate selection of activities and cost drivers allows managers to trace many manufacturing indirect costs to cost objectives just as specifically as they have traced direct-material costs. Because activity-based accounting systems classify more costs as direct than do traditional systems and because cost drivers have a stronger causal relationship between activities and resources, managers have greater confidence in the accuracy of the costs of products and services reported by activity-based systems.
Approximate Word count = 383
Approximate Pages = 1.5
(250 words per page double spaced)
|
|
|
|
|
|