Activity-Based Costing Systems Assignment Help

describe the Activity-Based Costing Systems major points of the article, and the reaction should demonstrate your interpretation of the article and how you can apply that knowledge.

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Summary

An inventory refers to in the context of manufacturing production all the items whether they are raw materials, partial or finished products prior to sale and ultimate departure from the unit. Just-in-time (JIT) inventory is a strategy to enhance efficiency and decrease wastage of receiving goods by the manufacturers. It is the process reducing the cost of inventory. At times the set up of fast equipment enables the manufacturer to create very short production runs which result in a reduction in the cost of finished goods inventory (Deming, 2018). JIT avoids the waste due to overproduction, holding excess inventory and waiting for raw material. JIT means what is needed in quantity when required in how much quantity is taken into account to reduce wastage and cost-cutting.

Activity-based costing system is useful to small companies. Strategically you have to calculate the cost of inventory and final sale of the products to increase profit to the company and ultimate financial gains. Decision makers determine cost information by actual data collection and by guessing intelligently about the various aspects of the product (The Benefits of Just-in-Time Inventory, n.d). Then overhead expenses such as administration, transportation, rent, advertisement to promote the goods, etc are added to the cost of the products. The concept of Activity-based costing system was originated by Toyota and is to work intelligently to reduce waste by keeping only minimal required inventory.

Discussion

While reviewing the article, my response would be to understand how the activity-based costing can help in building with the context of manufacturing production. This streamlines and also helps understand how the related items would synchronize the raw materials along with the partial or finished products that can be subjective to prior to sale and would also lead to the ultimate departure used from the unit. To evaluate how the Just-in-time (JIT) inventory is also created as a strategy it has to also build and enhancing the efficiency along with the decrease wastage which would help in receiving goods and relate to the manufacturers. In my opinion, this is the most useful tool as it helps to reduce and also lowers the cost of inventory. This is also a set of elements that can help to determine the fast equipment which would help to enable the manufacturer that can create and help the short production to determine the resultant approach.

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