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Essay / Research Paper Abstract
This 3 page paper looks at the way activity based accounting may be used for a firm such as Autozone, The concept of activity based costing (ABC) is discussed and then the different processes and potential divers are identified and a sample calculation is provided. The bibliography cites 4 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEABCauto.rtf
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Unformatted sample text from the term paper:
2008). For a company such as Autozone where there is the provision of auto part, any of these parts may be subject to the use of activity based costing in
order to assess how much they cost to make, and how much contribution/profit they can account for. The parts are all made on a regular basis, as such any time
period could be used for any of the own brand parts that are sold. However, it should be noted that most of these are made by third parties, as
such the process is one that looks at the movement and the sale of the products and not the actual manufacture. Activity
based costing can is also known as ABC costing (Vieceli, 1999). This is one of the more modern methods of costing and is seen as being more accurate and therefore
more effective if used in a decision making process. This is a system that looks to address the weaknesses in the traditional absorption costing. The theory that underlies this system
is that there is a higher degree of ability to trace costs to where they were actually used (Kennett and Durler , 2007; Vieceli, 1999).
This is a system that often takes advantage of new technology, the ABC system will identify the activity that has been performed, and then, based on
information already programmed into the system, or manual calculation if not on an IT system, make an allocation. This allocation can be seen as directly reflecting the consumption of resources
and costs of any particular product (Nair, 2000). This is maintained by specially designed cost drivers, for example the amount of people undertaking a task, or the amount of stages
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