What Are Organization Sustaining Costs


What are sustaining activities?

An activity supporting, but contributing directly to product quality, customer value or generation of revenue but that is necessary for the continuation of the organization. via

What is a customer sustaining cost?

A customer-sustaining cost is the cost of resources consumed to service a customer regardless of the number of units sold to the customer. Examples are: monthly statement processing costs, salesperson travelling expenses to visit customers, etc. via

What is ABM in accounting?

Activity-based management (ABM) is a means of analyzing a company's profitability by looking at each aspect of its business to determine strengths and weaknesses. ABM often makes use of information gathered with activity-based costing (ABC), a means of identifying and reducing cost drivers by better use of resources. via

Can ABC be used for external reporting?

Activity-based costing, or ABC, is a costing method that managers can use for internal cost reporting and decision making. While ABC isn't allowed for external financial reporting, companies may find it useful to enact an ABC system to more effectively analyze cost data. via

What are unit level activities?

Unit-level activities are activities that are related to producing each unit. This is unlike batch-level activities that happen every time a batch of products are produced. Unit-level activities are those that support making each individual unit, while batch-level include a group of units. via

What is customer level activity?

Customer-level activities.

These activities relate to specific customers and include sales calls, catalog mailings, and general technical support not tied to any specific product. via

What is the cost hierarchy?

The cost hierarchy is a classification system used in activity-based costing that designates activities based on how easily they can be traced to a product. Activities at the product level. These involve activities targeted at a specific product or product line, such as the cost to process an engineering change order. via

What are the stages of activity-based costing?

Step 1: Identify the products that are the chosen cost objects. Step 2: Identify the direct costs of the products Step 2: Identify the direct costs of the products. Step 3: Select the activities and cost-allocation bases to use for allocating indirect costs to the products for allocating indirect costs to the products. via

What is product sustaining level?

Product sustaining Level - Activities performed to support a product portfolio, independent of the number of units produced or production batches. via

Is ABM Strand difficult?

Is ABM Strand difficult? They thought that Accountancy, Business and Management (ABM) is probably one of the most difficult strand in Senior High School. Being an ABM student makes me more patient and responsible especially when it comes on the activities and performance tasks that I need to do. …… via

How does ABM work?

ABM is a business-to-business (B2B) marketing strategy that focuses on identifying accounts (i.e. companies) that match your ideal clients and targeting the key decision makers at those companies with personalized messages and content through your marketing and advertising campaigns. via

What are the jobs in ABM?

ABM can also lead you to careers on management and accounting which could be sales manager, human resources, marketing director, project officer, bookkeeper, accounting clerk, internal auditor, and a lot more. via

Is activity-based costing expensive?

Activity based costing systems are more accurate than traditional costing systems. This is because they provide a more precise breakdown of indirect costs. However, ABC systems are more complex and more costly to implement. The leap from traditional costing to activity based costing is difficult. via

What type of costing system is used for external financial reporting?

Under generally accepted accounting principles (GAAP), absorption costing is required for external reporting. Absorption costing is an accounting method that captures all of the costs involved in manufacturing a product when valuing inventory. via

What is the standard cost method?

Standard costing is the practice of estimating the expense of a production process. It's a branch of cost accounting that's used by a manufacturer, for example, to plan their costs for the coming year on various expenses such as direct material, direct labor or overhead. via

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