Use of ABC (Activity Based Costing) for Apple, Inc.
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Identify a product or service that Apple could use ABC and identify at least three activities for ABC and the appropriate cost drivers for those activities. Estimate the application rates for each cost driver. Summarize the information in a table and discuss how the information can be beneficial.
The following items will be assessed in particular:
If no practical actual amounts are available, can you make a reasonable estimate and apply the tool as if the data were factual. Estimates should be reasonable, justified and documented.
Please include:
The name and nature of the organization
The activity and time period you used
The inputs you used
Your results
Any benefits and implications from your results.
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The solution discusses the use of activity based costing for Apple Inc.
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Apple Inc
Apple Inc is responsible for designing, manufacturing and marketing a wide product range of personal computers, portable music players, software, networking solutions, mobile media and communication devices and also offers services (Reuters, 2011). Some of its products include iPhone, iPad, Macintosh, Apple TV and a wide range of software applications. Apple Inc operations can be divided into North and South America, Japan, Europe, Pacific Asia and retail. The company targets a wide range of customers and offers various products for customers such as businesses, education centers, government and personal use (Reuters, 2011). The Apple product that we are going to use activity based costing is MacBook. The product is under Macintosh category and is a notebook computer
Activity based costing is an accounting tool that is used to determine the actual cost incurred in producing a product or offering a service (Stratton et al, 2009). It is mainly used to allocate indirect costs and support resources to activities. Activity based accounting focuses on identifying activities ...
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