Glaser Health Products Essay

Glaser wellness Products of Ranier Falls, Georgia guides assistance in evaluating and classifying approach in order to appliance an legal action-based equaling arranging. As stated in the case, these represents leave be utilize for planning and control finishs quite a than account valuation. The bodily surgical procedure-based embodying system will admit violate allocation of Glasers viewgraph be rather than a system to boldness at the salute drivers or the activities that their crash be comprise. Glasers worldwide structure of an body process-based cost model should rest of cost objects, activities, consumption of resources, and cost. Activity-based costing changes the rules of the stake since it changes near of the key esteems that managers use for their decision making and for evaluating individuals consummation (Accounting4 focussing.com). In order for Glaser to see a successful activity-based costing system circumspection essential take a expl ore at their strike be and vindicate whether or not they shake profuse viewgraph to be worrying about. patch we do not know Glasers m oneness and only(a)tary value of their overhead costs, it seems that they have several divisions with a large pith of cost categories forethought must consider.The tether main divisions of Glaser Health Products be Operations, Sales, and Administrative. infra separately division are costs categories that have been divided up to supporter management determine where they belong. (Appendix A identifies each(prenominal) of the costs with the appropriate division). Next, management must identify the big overhead cost in order to determine whether or not they want to allocate some or a bunch of overhead using the activity-based costing system. I purport that Glaser creates an activity-based costing system that allocates, with a marginal amount of effort, a large piece of their overhead. For instance, management is correct in identifying e ach of the costs using tetrad unalike activities. These include unit-level activities, batch-level activities, harvest-tide-level activities, and facility-level activities. This is a great system because the fewer activities Glaser can use to do this, the easier the accounting will be for management.These four activities will allowGlaser to fairly and accurately allocate overhead to harvest-time lines. (Appendix B illustrates each of the costs at a lower place one of the four activities and also classifies the four activities under one of the three divisions). After Glaser management has identified the handful of the activities that connect overhead expenses to products, they must use the appropriate measure (the cost driver) to tie the overhead expenses to the product lines or service lines. To achieve this management must specify an appropriate cost driver for tracing costs associated with the unlike levels of activities to the next cost objective or products. The cost drive rs can include a total of things such as broadcast labor hours, number of batches, or number of employees. (Appendix C shows the appropriate cost driver with the various levels of activities).Under the Activity-based costing system, Glaser will use prelim academic degree cost drivers to link costs of resources consumed in one activity center to other activity centers. Some costs, such as batch-level activity center costs are initially sayed to a special point activity center and only need a single assignment process, and are traceable to specific products but lots use a cost driver. Product-level activity center costs may be related to a specific product or grouped by activities in the beginning being assigned to products at the unproblematic stage. Facility-level activity center costs may go through multiple preliminary stages before being assigned to products (Schneider, 2012). It is prerequisite to use a preliminary stage cost driver because this system assigns costs f rom activities to other activities.On the other hand, primary stage cost drivers is used to assign costs from activities to the cost objectives. This process eliminates distortions in cost allocations to products that result from production complexness (Schneider, 2012). Actually sitting down and position out an activity-based costing system for a real company is much more baffling than a typical text ABC problem. Determining what causes a cost to occur is much more difficult than it originally might seem (Krupnicki & Tyson, 1997). Overall, I think that managements decision to implement an activity-based costing system is exit to work in their favor. The decision to implement ABC is often driven by the need to improve customer favourableness analysis, to gain more accurate cost information for pricing or to entrap relevant budgets (Cohen, Venieris, & Kaimenaki, 2005).In this case, Glaser wants to identify costs used for planning and controldecisions rather than for inventory v aluation. Glaser is likely to see legion(predicate) benefits from implementing an activity-based costing system such as better profitability measures, better decision-making, process improvement, cost estimation, and cost of unused capacity. The activity-based costing system will provide better allocation of Glasers overhead costs rather than a system to look at the cost drivers or the activities that their overhead costs comprise.Referenceshttp//www.accounting4management.com/implementing_activity_based_costing.htm Schneider, A. (Ed.). (2012). Managerial Accounting finis Making for the Service And Manufacturing Sectors. San Diego, CA Bridgepoint Education. Krupnicki, M., & Tyson, T. (1997). employ ABC to Determine the Cost of divine service Customers. Management Accounting, 79(6), 40-46. Retrieved from http//search.proquest.com/docview/229739140?accountid=32521 Cohen, S., Venieris, G., & Kaimenaki, E. (2005). ABC Adopters, Supporters, and Deniers And Unawares. Managerial Auditing Journal, 20(8), 981-1000. Retrieved from http//search.proquest.com/docview/27453714?accountid=32521