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The use of Industry data can forecast cost and revenue through the products or services; therefore, Activity Base Costing will be appropriate for a company’s development. Software applications are being researched and discussed throughout the analysis. Still, without any previous data regarding the operation, then a simple Microsoft Excel spreadsheet may be used to start the Activity Base Costing (ABC). A current accounting source is the ABC methodology called Time-Driven Activity-Based Costing, which is a simplified and proven solution to the complexity of ABC. Time-Driven Activity-Based Costing differs from traditional ABC in that it takes the analysis down from the high-level activity volume picture to a forensic understanding of costs, profitability, and process efficiency - the right to where the information is most valuable at the individual transactional level. The newly enhanced methodology uses simulation modeling, which allows you to examine in detail how you can optimize your resources. Therefore, enabling you to implement intelligent cost-cutting and generate greater operational efficiency so that you can maximize your business potential (McGowan 2009).
Do you apply similar accounting concepts for your business?