Costing is the process of tracing and allocating costs to a product, service, or a cost center (Drury, 2008). The cost of a product consists of both direct costs and a fair share of overheads. There are number of costing techniques that Monster Beverage can use that include process costing, job costing, absorption costing, and activity based costing (ABC). Process costing assigns costs to products as the move through various stages or processes (Drury, 2008). In process costing, costs for each process are accumulated over a period such as a month and then the average cost is allocated to ...
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Introduction
One of the key challenges that management accountant have faced is allocating overheads costs to the products. In overcoming an attempt to address this challenge, various ways have been devised. One of the most instrumental developments in the allocation of overhead is the development of ABC accounting. ABC costing is an improvement to the traditional accounting approach that has always been in use. The method appreciates that there are numerous costs drivers hence identities these cost drivers and uses them to pool costs in order to allocate them to the products (Bendrey, ...
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