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Essay / Research Paper Abstract
This 3 page paper demonstrates how activity based costing may take place, using the case of Quaker oats to demonstrate the different stages the writer looks at the various processes and the derivers that may be used to assess costs. The bibliography cites 2 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEABCpepsi.rtf
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Unformatted sample text from the term paper:
follower position in the beverage market, trailing behind Coca-Cola and has many market leader brands. This is a market where there needs to be careful control of costs, with
the production of a large amount of low value items, where a small variance could have a high impact on the profitability of the firm. Likewise pricing decisions are very
important, with the need to ensure that pricing can achieve a product in the competitive environment, which means firms are likely to use target pricing, which also means controlling costs
(Kaplan and Anderson, 2007). Traditional costing methods have the potential to be inaccurate, based on historical information and the use of assessed allocations of overhead costs which
has a high potential to result in inaccurate costing. The alterative to this is activity based costing; the aim here is to break down the different processes that are involved
in the production of different goods. In this example we will look at the production of the Quaker porridge oats. For these to be produced there are different costs, there
is the cost of the oats themselves, bought from the farmers, there is the cost of transportation, and the cost of the manufacturing to prepare the oats for sale. There
is also the cost of the packaging, which is brought in as flat packed cardboard and inner waterproof paper packaging, the oats are then placed into the packaging, boxed and
then logistics send them to the buyer, mainly wholesalers or large supermarket chains. Here we will look at an activity based costing The firm does not declare individual costs
or show whether or not activity based costing takes place, so we will have to make reasonable assumptions. This means looking at potential drivers. The cost of the oats is
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