Assignment 1 Absorption Variable, and Activity Based Costing

Assignment 1 Absorption Variable, and Activity Based Costing

Table of Contents Module 3 M3 Assignment 1 Discussion

M3 Assignment 1 Discussion

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Assignment 1: Absorption, Variable, and Activity Based Costing By the due date assigned, respond to the following in the Discussion Area below:
Continuing the scenario from the Module 2 discussion, think about the costs to manufacture your product. Review the concepts of activity based costing.
If you implemented activity based costing for your division, what additional costs would you consider as manufacturing costs? How would you allocate those costs to your division?
Would activity based costing give you a more or less realistic picture of your divisions costs incurred to produce revenue?
If you chose to not fully implement activity based costing, what would you have learned about your department’s costs that would help you operate more profitably?
Be sure to cite any sources using APA style. You may use this APA Citation Helper as a guide.
Through the end of the module, provide substantive responses to at least two other students’ initial posts.
Assignment 1 Grading Criteria
Maximum Points
Initial Response
20
Discussion Participation
20
Writing Craftsmanship and Ethical Scholarship
10
Total:
50

Assignment 1 Absorption Variable, and Activity Based Costing

Assignment 1 Absorption Variable, and Activity Based Costing

This methodology of costing is based on identifying activities within the organization and assigns the cost of each activity with resources to all products sold or service offered as per the actual consumption of every product/service. On this basis, activity based costing considers more indirect/ overhead costs as compared to direct costs (Kumar & Reinartz, 2018). For my project as discussed in module 2, the cost to invest in the royal services limited will have to consider not only direct costs such as salaries and infrastructure but also indirect costs such as rent.

What additional costs would you consider as manufacturing costs? How would you allocate those costs to your division?

Using activity based costing, most of the overhead costs will have to be considered as manufacturing costs. Such costs include: Business licensing which is mandatory before the business starts, Rent and other utilities such as internet/broadband services, Electricity as well as water and other social amenities (Jänkälä & Silvola, 2012). This costs will be allocated using direct method as part of starting capital and hence have to be factored in while buying stationery.

Would activity based costing give you a more or less realistic picture of your divisions costs incurred to produce revenue? Activity based costing will provide

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