Activity Based Costing

8 Conclusion……………………………………………………………………………………………………………………. 10 Work Cited…………………………………………………………………………………………. 11 Abstract Management in the accounting field requires diverse methods that can be fully incorporated to meet the required mechanism in accounting. In the present society, accounting is one of the most critical fields that is used to create able economic growth for any nation. The economies of the world therefore largely depend on the economic scale and how we view things that constitute the economic scale. Activity Based Cost9ing is a vital tool of management in every organization. It is used to create an effective plan for the realization of the core needs of the organisation. Every business has its well-developed Activity Based Costing initiative. Meeting and ensuring that all the factors of production in an organisation require an effective plan that will ensure that the organization has a well set up plans that will provide there is unity in the organization.

Unity, in this case, means that each department or each production field in the business must meet all the required costing that will work towards the realization of the all planned things that need to be accomplished within a given period. However, Robin and Robert disputed this saying that it was biased and could not take into action the whole needs of the organizations far as production is concerned. Robert and Robin, therefore, argued that the overhead cost was supposed to be the most significant percentage and it should 60% of the total production costs. On the other hand, raw materials are supposed to take only 30%, and the labor costs should take the remaining percentage, which in this case is just 10% of the total production line (Cokins 92).

Robin and Robert also developed a plan that was also based on competition making the new Activity Based Costing to be determined regarding the profitability aspects that can bring on the development concept in the production line. Over the years, competition has changed dynamically and many brands, methods and services are now provided in the market. It led to the development of some software such as GUI which formed the basis of discussion and the general implementation of the Activity Based Accounting (Leitner 135). Comparison Between the Activity Based Costing and the Traditional Methods Before the introduction of the Activity Based Costing, it is worth noting that there was another different method that was applied in the production industry. This method has primarily come to be known as the Traditional methods.

Many differences can be witnessed and created from the Activity Based Costing and the Traditional Methods of organizing the product in the accounting field. A much as the traditional methods developed to be helpful; during the past in meeting and creating and meeting the tax requirements and the value valuation, this method had some significant flows that questioned the viability and the applicability of this method in production. Activity Based Costing is also technologically versatile. It mostly depends on the basis and the development in the modern field of information technology, and hence it worked towards the production and creation of the best results that can be detrimental and applied in the modern production units with ease. The efficiency of the Activity Based Costing Activity Based Costing is very efficient.

It is a methodology used by many companies in the present society and has been proven to be efficient and working. Many companies have been using the Activity Based Costing to run their activities within the management setting of their organisation, and complementary success has been realized. Special treatment is given to everyone, and this ensures that the business is running on the right track. Activity Based Costing largely depends on the activities that are necessary for production but not on the products. Here, the activities that are done for the success of the production process is always the critical point. Nothing superseded the idea to develop the best production techniques to play as the quality of the production process will affect the entire project.

Quality of the method that is applied is what will produce either the best or the negative results. The relevance of the Activity Based Costing Activity Based Costing has evolved to be the most applied method in tracking out the development concepts in any orgasmatron. It is a useful method that has been proven to be working and all-inclusive. One of the core reason why you should consider using the Activity Based Costing in the production process is the accuracy of all the information in all the activities that are run in the organization. The model is created with a well-followed method that allows for precision and also provides the best framework for the future implementation of all the activities that the organization will like to accomplish in the future.

The future concerns of the information that can be applied in the recreation of the activities and the planning process will form the basis of inclusion in the general production process. The specification and clear outline of each activity in the affairs of the organization and it costs makes the best multidimensional methodology of analysis with the panoramic focus on the costs of each activity. This will provide the best method through which the business will sort out and review all the budgeting of the activities that ought to be managed. These reviews on how the business runs are based on the total creation and upholding the broader point of views of eliminating all the expenses that can prove to be much more costly and do not add any significant impact in the production process (Leitner 154).