A Study on Application of Activity Based Costing in Khootka Food Industry
Published: 2012
Author(s) Name: Mojdeh Kashef Vaighan, Rohullah Tavakolizade, Ali Habibi |
Author(s) Affiliation: 1- MBA, Osmania Univ.; 2&3- Dept. of Accounting, Kahnooj Branch, Islamic Azad Univ., Kahnooj, Iran
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Abstract
In this scholar we tried to collect the data
from Khootka’s company and compare the cost of
product in two different methods VBC &ABC and
comparing the results. As you can see the allocation
of cost by VBC method is not appropriate. By help
of ABC the company can have insight knowledge
about its cost and proper allocation of them. As the
allocation of the direct material and labour is the same
in both methods the difference is derived from the
allocation of indirect cost or overhead cost. By
effective control of the cost, management can have
the economical units which can benefit the company
as long as the customers by providing the appropriate
product with reasonable price and prevent from
wasting the sources. In a more general look even
society can benefit by effective production, lesser
inputs more outputs. In another aspect in the cut throat
market a company can survive which can manage
its cost more efficient than its rival. In nut shell having
a complete control over the cost is crucial for any
concern and act like a heartbeat of the body.
Keywords: Activity Based Costing , Cost Drivers , Overheads Traditional Costing.
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