Accounting for Decision Makers -Discussion Question Essay

Accounting for Decision Makers -Discussion Question - see ExampleThe rudiment model enables condescension organizations to adequately approximate the cost elements applicable to the products, activities and services. The cost elements enables business organizations make appropriate decisions. One decision entails identifying products and services that are loss generating or less profitable. The snatch decision entails removing the service and product which are ineffective, and ensure processing approach which results in better tractable products and services. ABC analyses the product and consumer expenses and also profitability, according to the production and the performing processes. Thus, ABC has the applied in encouraging strategic business aspects like pricing, outsourcing, and also the process improvement approaches (Hartgraves & Morse, 2015).ABC illustrates fixed costs, variable costs, and smasher costs. The cost split illustrates the cost drivers. For example, in oper ate machines, the main cost driver is the machine operating driver. This is because the machine operating hours greatly influences the labor, power and also machine maintenance costs. ABC is effectively apply in routine business processes. ABC ensures allocation of adequate resources to the profitable products and activities, resulting to enhanced profitability levels. ABC also ensures the removal of unnecessary costs, and this improves the revenues generation levels of the business organization (Hartgraves & Morse,