Finance Task #4 Carbon-Lite Bike

Memo To:Board of Directors From:Michael Allen Date: 10/07/2012 Re: effect base representing Summary Report 1. Recommend whether the company should c areen its comprise method to activity found constituteing. The Activity ground bell accounting approach is comprised of matching the hails with activities (These are identify as the personify drivers) that cause those costs. This is similar to adding an redundant bed of virtualization in computer storage area lucre (SAN) carcasss in that a more granular kind of absorption-cost ground system and replaces the labor-based cost system. Activity base Costing presumes that: * products postulate activities * It is the activities (and non the products) that consume resources, * Activities are the cost drivers, and * Activities are not of necessity based on the volume of production. Instead of allocating costs to cost centers (such as manufacturing, marketing, finance), Activity Bas ed Costing allocates direct and confirming costs to activities such as processing an order, attending to a customer complaints, or setting up a machine. A subset of Activity Based Management (ABM), it enables management to better figure out into: * How and where the firm makes a profit, * Indicates where money is being spent, and * Which areas have the sterling(prenominal) potential for cost reduction? (WebFinance, Inc) Table: Activity Based Costing Analysis Competition Bikes. Item| Activity Cost Pool| Cost number one wood| Cost Driver quantity| Pool Rate| Product barrier| Cost Driver Quantity for Product Line| Activity Cost for Product Line| Product Line take Volume| Activity Cost per Unit of Product| mill| 33,400| Setups| 545| 61.284| te| 45| 2,757.80| 900| 3.06| Setups|  |  | |  | Carbon Lite| ergocalciferol| 30,642.20| 500| 61.28|  |  |  |  |  |  |  |  |  |  | Quality| 119,000| QC Inspections| 509| 233.792| Titanium| 9 | 2,104.13| 900| 2.34| Control|  |  ...I! f you want to cop a overflowing essay, order it on our website: BestEssayCheap.com

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