Activity-based & Process Costing
Unit 3 (IP)
AIU Online Virtual Campus
05-11-2012
Abstract
The discussion on this paper will be about a ski company that is considering branching out their company by either buying or producing some manufactured goods to boost their business during the winter months. This ski company produces and sells an exceedingly victorious profile of water skis, but are studying about the most current intersect-country skis. If this company decides on obtaining the strip wanted or they can produce the bindings for their skis to switch them into snow skis for the winter then they would need to know whether they are gaining or losing profits for the company. If gaining the profits then the company will need to expand the business, but if losing the profits then they will need to go back to step one and look to see if they did not jump before the gun on a much bigger step than they should have taken. Activity-based & Process Costing

A collection of techniques and tools can identify with how management’s decisions can affect costs through a cost management system (CMS). The CMS computes the organizations activities in performance and by the costs of resources, in order to access the change in costs in the business activities. This system can provide to your business an aggregate measure of inventory value and the manufactured cost of goods on the external reports that are submitted to the investors, creditors, plus other external stakeholders that have interest in your company. It can also assist the executive with tactical decisions required by the company. The CMS can also help in to monitor the process of the company. There are also two other systems that can be of assistance and they are the action-source bookkeeping and the action-source organization, besides the involvement-leeway method and the price-volume earning investigations.