Question

Please write a short report (not more than 600 words) concerning the allocation of indirect costs using plantwide, department, and ABC rates.
The report should focus on the following:
• The nature of each

• advantages and disadvantages

Answer 1

ANSWER:

A portion of Indirect cost Using Following strategies

ABC Rates

Advantages

• Determine the item edge all the more viably.
• Determine which procedure cost is unnecessary and the Wasted expense.

Disadvantages

• Costs more to gather And Analyse data.
• Information created by Abc struggle with managerial And Traditional costing strategies.

Department rates

Advantages

• It helps the administration speedier dynamic with Regards to cost inline.
• Its simple to discover the expense of different items manufactured by the organization.

Disadvantages

• It Creates excess in light of various items made by the organization.
• Expect that departmental O.H proportional to Allocation cost.

Plant shrewd

Advantages

• Information is promptly Available.
• Easy to execute.

Disadvantages

• O.H cost May not Bear with Direct work cost.
• All Products may not utilize o.h cost the same bit.