In a situation where the profit margin can vary greatly between customers that are charge the same price, increased transparency of costing will empower the company to adapt their pricing system so that costs could be more effectively recouped in the way the contracts are negotiated (O'Guin, 1992). Activity-based costing allows for the different stages of a process (the activities) to be costed in an effective manner, including costs that are traditionally assumed as overheads. In maybe argued that the management made a very good decision; the process was one suitable for activity-based costing, with a number of different activities taking place, and the benefits of increasing transparency are likely to outweigh the costs of the implementation with the way it will help both control costs by understanding where costs are incurred, as well as with pricing strategies (O'Guin, 1992). When adopting activity-based costing the firm could choose from two different types of costing model; job order system costing and process order system costing. In both cases there are commonalities, but there are also some significant differences. Process costing is most frequently found in organizations where there the operations involve continuous processes. For example, a canning factory has a continuous process, although they may vary the contents of the different...
As this model is based on a continuous process, it is not facilitate a differentiation between different types of customers, with the assumption that they are all compatible. For many organizations is may be true, but it is not truth is simple bakery, therefore process costing is unlikely to be the best approach to activity-based costing.
Finance Activity-Based Costing at Super Bakery The management at Super Bakery has developed a very lean business model which is an efficient use of capital. The model is based on the concept of a virtual organization. In this business model the firm owns very few assets that are required for production; by outsourcing to third parties the firm does not need to make the investments that are traditionally associated with production companies.
Strategic Planning in IT IT Impact on Service Industry Performance Cooperative Competitive Competitive Advantage Implementation of IT Innovations 1992 U.S. VALUE-ADDED AND EMPLOYMENT BY INDUSTRY AVERAGE ANNUAL GROWTH IN GDP PER HOUR, MAJOR SECTORS OF THE U.S. ECONOMY Management TASKS IN BUREAUCRACY VS ADHOCRACY ORGANIZATIONS This paper addresses the following problem statement: "Without information technology (IT), a business will not be able to compete globally in any industry, nor in any market it wants to enter. It will
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