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Determining product cost more accurately
Determine the fairness in calculating activity based cost accounting.
Providing sufficient information which will be utilized in decision making in product lines.
Allocating overheads as a considerable portion of total cost structure.
Our expert activity based accounting writers had helped students to form a specific structure in designing and implementing cost in an activity. Our writers explain the process of implementing the accounting based cost on activities in the following seven ways:
Step 1: Identifying the objective of cost
Step 2: Identifying the various cost like direct and indirect cost
Step 3: Finalizing and distributing the allocation based on their utilization of overhead cost.
Step 4: Determining and finalizing the overhead cost.
Step 5: Calculating the rate of cost for every unit of activity.
Step 6: Calculating the different overhead cost for product allocation.
Step 7: Finally determine the cost of products.
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