Data developing to measure a cost competitiveness

Question

Illustrates the data developing to measure a cost competitiveness of the company?

Answer 1

1. The next phase in evaluating a company’s cost competitiveness includes disaggregating or breaking-down departmental cost accounting data into the costs of executing exact activities.

2. A good guideline is to build up separate cost estimations for activities having different economics and for activities symbolizing a significant or growing proportion to the cost.

3. Traditional accounting identifies costs according to the broad categories of expense. A newer technique, activity-based costing and requires defining expense categories according to the exact activities being executed and then assigning costs to the activity responsible for generating the cost.