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Finance & Accounting
Pages 9 (2259 words)
Crocargo Logistics is a logistic services firm.Amongst its services are import,export and transit of parcels and packet from an air carrier to Auto shop.The company although is getting enough contract to remain in the market,is still running operations a loss…
The business has been unable to generate enough capital to increase the ultimate profitability of the firm. The fundamental problem highlighted in this case is that of an inadequate costing system and an internal environment characterized by friction. The company is operating in a very hostile and competitive marketplace. The costing system that is needed to support the operations of the company is totally inadequate to keep the company operational for a very long time. The current costing system has been developed by the company’s operations manager who is more than satisfied with her costing system. She is not willing to take anyone’s opinion regarding the problems inherent in her system, as a result of which the company is not accounting for the costs it is actually incurring. The general manger of the company has finally realized this problem and has called for an external help who would suggest a more competitive costing method. Introduction An activity-based costing technique is one of those techniques which enable a company to identify its costs objects more accurately. This aspect of this technique has profound implications on a business, for instance it allows a company to identify unnecessary costs, price its products or services more efficiently and last but not the least it allows a company to be more competitive in its industry. ...
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