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Preliminary Analysis of Cost and Budgetary Information Systems - Essay Example
Finance & Accounting
Pages 6 (1506 words)
Preliminary analysis of cost and budgetary information systems Name Here Name of Institution Date Class Name Date Report on Preliminary analysis of cost and budgetary information systems May 9, 2012 Worplestrop Partnership Partners Prepared by XXXXX Accountant (Signature) More than often, organizations ensure that an analysis of varied product cost and budgetary control methodologies and systems are carried out…
Outline of Product Cost and Budgetary Control Methodologies and Systems • Product costs include the cost estimates that are based on material, labor and machine process that influence decisions made by management. It is either based on activity based costing or traditional based costing (Kaplan & Anderson, 2007). • Activity based costing is adopted from the conventional costing system and it assumes that activities act as fundamental cost objects because, cause costs and cost objects are known to create demand for activities. • Traditional based costing utilizes costs based on a single, volume-based cost driver, it assumes that product causes cost because; it assigns the overhead costs to products based on relative usage of direct labor. • Budgetary control is a tool used by management in maximizing profits through minimization of costs involved in operation forecasts using management and accounting control. ...
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