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Question 10 - CSCP discussion

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Which of the following costing approaches directly reflects logistics performance?

A.
Activity-based
Answers
A.
Activity-based
B.
Total landed
Answers
B.
Total landed
C.
Standard
Answers
C.
Standard
D.
Weighted average
Answers
D.
Weighted average
Suggested answer: A

Explanation:

Activity-based costing (ABC) is a method that assigns costs to products and services based on the resources they consume. Here's why ABC directly reflects logistics performance:

Cost Allocation: ABC assigns costs to specific logistics activities (e.g., warehousing, transportation, order processing) rather than spreading costs evenly across all products.

Performance Measurement: By linking costs to specific activities, ABC provides insights into the efficiency and performance of each logistics function.

Cost Drivers: Identifying cost drivers helps in understanding the factors that influence logistics costs, enabling better decision-making and process improvements.

Detailed Analysis: ABC allows for a more granular analysis of logistics costs, highlighting areas where performance can be improved to reduce costs.

Cooper, R., & Kaplan, R. S. (1991). The Design of Cost Management Systems. Prentice Hall.

Drury, C. (2013). Management and Cost Accounting. Cengage Learning.

asked 16/09/2024
Parita Malbari
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