Question

2. Some companies have eliminated the collection and reporting of detailed analysis on direct labor costs broken down by various activities. Instead, first-line supervisors are responsible for controlling the total costs of direct labor. The justification for this argument is that labor costs represent only a small fraction of the total costs of producing a product and are not worth the time and effort to trace to individual activities. Do you agree or disagree with this argument

Answer 1

Answer:

The description would be presented downwards and as per the circumstance presented.

Explanation:

• Instead of assigning resources associated with a specific frequency, activity based costs which always track costs on the basis seem to be an essential component of cost accounting because that would be a more effective means for providing resources.
• The costs when implementing some activity based accounting systems, furthermore, are even less than the potential advantages of moving towards this framework only then would it have been simpler as well as productive for the growing company ABC.
• Throughout the case situation, the claim whether direct labor constitutes a member of a minority fraction of the overall wages should not be an excellent explanation for either not apportioning production wages contingent on the operation, but if the organization determines that the expense of someone using ABC to assign labor profitability of different practices is greater than advantages, the organization increasing turn to something like an optimization model for that frequency.