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WK3_Team_Assignment_Part_1.docx Team Assignment Part 1: ABC Accounting for Leighton Ber

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WK3_Team_Assignment_Part_1.docx Team Assignment Part 1: ABC Accounting for Leighton Beridon ACC/349 University of Phoenix Team Assignment Part 1: ABC Accounting for Leighton Beridon Leighton Beridon is a client ...

WK3_Team_Assignment_Part_1.docx Team Assignment Part 1: ABC Accounting for Leighton Beridon ACC/349 University of Phoenix Team Assignment Part 1: ABC Accounting for Leighton Beridon Leighton Beridon is a client that came to us needing assistance with his pecan and sod farm. He has been keeping a ledger and has a steady business all year but even though he is using all his inventory at the end of the year he is still not gaining in net profit from previous years. When his daughter suggested he investigate activity-based cast accounting he contacted us. Our goal is to help him break down his books to further research why he is not making more profits, Mr. Beridon is very concerned and has recently contacted us after we have start and expressed, he thinks he may stop offering the sod part of his business and just keep the pecan trees. We have expressed concern with him regarding this decision as we are not sure that picking one over the other is the solution to his issues. We took this opportunity to explain the difference between activity-based costing (ABC) vs. traditional. It is explained that we use cost drivers, which are the activities that is the root cause of why a cost occurs. Traditional method uses single drives that average of coat overhead such as labor cost. ABC method breaks down these drives so you can see where money is coming and going specifically to know the best way to cut expenses or utilize more. Example would be breaking down labor cost to what individual employees are doing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . .. . . . .

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