. Why do companies control costs? Apart from the obvious drive for profit what decisions might be affected by a need to

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Why Do Companies Control Costs Apart From The Obvious Drive For Profit What Decisions Might Be Affected By A Need To 1 (98.88 KiB) Viewed 57 times

. Why do companies control costs? Apart from the obvious drive for profit what decisions might be affected by a need to control costs? Provide definitions and examples of direct costs, indirect costs, hidden costs, variable costs, semi-variable costs, fixed costs and general/administration costs. Using the case study found below produce an Excel spreadsheet which shows the initial traditional costing and overhead split and then produce an Activity Based Costing (ABC). Finally, you should reflect on the results of your activity- based costing exercise, by: a) Explaining how costs are categorised b) Identifying those cost areas that have the greatest impact on the profitability of the product c) Evaluating the reasons for producing an activity-based cost model. Give advantages and disadvantages of ABC.