MBA Accounting

Activity based costing is nothing new but it has been recently been catching up due to many who starting to perceive the inadequacy of using the normal traditional methods.

Append below is a listing of all articles pertaining to activity-based costing:

Principles of Activity-based costing

An overview approach of Activity-based costing 

Shortcomings/Limitations of the traditional based costing compared to Activity-based costing 

Factors and Steps/Procedures in the implementation of activity-based costing 

Types of Activity Measures & Activity Cost Pool & Corresponding Activity Measures

Activity-based costing as a One-step attribution system compared to other traditional systems

Constraints/Limitations Of Activty-based costing

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Pricing plays an extremely crucial role in making people buy the product(s) or service(s). Hence, managers need to understand some basics about some of the contemporary pricing methodologies.

Append below is a list/snapshot of all articles on pricing methodologies:

Different Types of Pricing Methodology

What Are the factors to consider in pricing

Variable or Marginal Cost Plus Pricing Method

Minimum Pricing Method

Break-even Pricing Method

Rate of Return Pricing Method

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Append below a list of articles under the heading of Relevant Costs:

Understand what are relevant costs used in short term decision 

Types of Relevant costs (Part1)

Types of Relevant costs(Part2)

Limiting factor in Short Term Decision

MAKE OR BUY -Short Term Decision

SPARE CAPACITY-Short Term Decision  

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Append below is a list of articles under Cost-Volume-Profit(Managerial Accounting:

Break-even point in Cost-Volume-Profit

Steps to follow in Using Contribution Margin in the Cost-Volume-Profit Relationship

Cost-Volume-Profit Relationships - Benefits or Objectives 

Limitation of Cost-Volume-Profit Analysis In Short Term Decision 

Introduction & Assumptions Made in Cost-Volume-Profit 

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Append below a list of articles under the heading of Cost Behaviour(Managerial Accounting):

Cost Unit Versus Cost Centre

The Difference Between Allocation And Apportionment

How Costs Being Classified

Product Costs Versus Period Costs

Direct Costs Versus Indirect Costs

Fixed, Variable And Mixed Costs

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Below is the snapshot of all articles pertaining to Budgeting:-

1. The Objectives of Budgeting(Part1)
2. The Benefits & Limitation of Budgeting(Part2)
3. Key Success Factors for Budgeting(Part3)
4. Steps Involved in Budgeting(Part4)
5. Difference between Budget & Budgetary Control System(Part5)
   
6. Key features of budgetary control(Part6)
7. Objectives & Purposes/Roles Of Budget Commitee(Part7)
8. Budget Manual(Part8)
9. Types Of Budget-Flexible Budget(Part9)
10. Types of Budget-Incremental Budget(Part10)
11. Types of Budget-Zero Based Budgeting(Part11)
12. Understand what is Responsibility Accounting(PART12)
13. Understand what is Capital Budget,Operating Budget, Summary Budget & Master Budget
14. What is in the Cash Operating Budget?
15. What is in the Production Operating Budget?

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Some salient points on the Production Budget

• For the production manager to know how much to produce during the budgeted period, obviously he/she needs to know the sales budgeted. Only then can he consider the production capacity and also to take account the planned closing stocks of finished goods.
• Once the volume of production is ascertained, he has to prepare a statement of expected manufacturing costs. Costs should be classifie into fixed and variable costs to allow for flexible budgeting. (more…)

The Sales Budget is the first budget preped. It is derived from the sales forecast (estimate of sales revene for the budget period).

Salient points about the Sales Budget:

• The formula is simple namely Sales Forecast=Quantities forecast X Selling prices

• It has a detailed breakdown by product,area,timing, volume and value. The detailed breakdown is to enable the preparatin of production budget as well as the company’s cash budget. (more…)

Budgets can be broadly classified into two categories:

• Capital Budgets
• Operating Budgets

Capital Budget:

• is concerned with the provision of resources for the long-term running of a business for example, the Capital Expenditure Budget (more…)

Some managers or readers who are assigned to build up an activity based costing system might be at a loss on how to even embark on this assignment.

To do it, please look at the earlier articles on steps, conditions, factors,etc are provided.

In this article, the overview approach is given to implement the activity based costing procedure of a company:

1. First study the organization to identify all those activities which support production. Some of these support activities are inspection, setting up machineries, moving materials around the factory and purchasing materials. Note that support activities need not be single department. (more…)