Management accounting assessment Assignment Example | Topics and Well Written Essays - 750 words

Management accounting legal opinion - Assignment ExampleActivity based coating recovers these additional cost far much pause than the traditional methods.Activity based cost (ABC) is an alternative method that wholeows crashs that cause analysis in groups that be influence the same activity. The group is cost pool while the activity is the cost driver. ABC produces a more accurate cost assignment.Doing this special job because the recovery methods utilise by the traditional overhead absorption method ar volume based which is erroneous since a majority of the overhead be is fixed and they are not affected by volume. A change in volume in the traditional method results to a change in activity level meaning that there is social movement of under and over developed overheads due to the change in volume. Most companies use the variable costing method and they achieve their set objectives. It is offers the management with the options of providing better decisions for the company. In the absorption method, the cost of the product consists of all the variable cost plus the fixed manufacturing costs. Fixed costs are not included in the costing of the product.2(b) I agree that Cost Volume Profit analysis is simple as takes the effrontery that output is the only cost and revenue driver, which have a linear relationship. The assumptions in this case are simplistic in finding the decision to problems relating to fixed costs and variable costs. The assumptions can be used to facilitate the CVP analysis to give insight that is useful.Cost is relevant when, it is future oriented. It means the cash flows must(prenominal) arise in the future, be incremental, and have to be cash flows. In the context of capital investing appraisal, a relevant cost is a cost incurred because of the appraisal process and it may include sore costs such as the cost of hiring machinery to construct a factory or additional costs in acquiring new material. Irrelevant costs are