Overhead Costs Company Example
This week we covered Chapter 3, Process Costing and Chapter 4 Activity Based Costing. Process Costing is for manufacturers which assemble products that are identical. Activity Based Costing assigns costs to overhead activities and then assigns those costs to the assembled products. Using the company in your Week 1 post, please identify some overhead costs in the manufacturing operations. What makes these overhead costs and what cost driver should be used to apply the overhead costs to the products? Please use original work. No plagiarizing.
Week 1 Post is below
Managerial accounting also called cost accounting is the process of measuring after identifying, analyzing, interpreting and also communicating information to the supervisors or the managers in pursuit of objectives of a particular Organization/Company. Fiat Chrysler Automobiles N.V. is an Italian-American Multinational entity and ranked as the world’s number eight largest auto creators (Maryanne M. Mowen, 2015) . The Company is headquartered in the Netherlands with the financial headquarters based in London for purposes of tax filing among others.
At Fiat Chrysler Automobiles N.V, managerial accounting is used in consolidating the stakes with an example of an instance where the Company together with Renault raised the stakes for themselves by ruling out the closure of plants (Maryanne M. Mowen, 2015) . This increases pressure to achieve more than $4 billion, in particular, promised savings for the year from pooling research and procurement investments. Such a plan is a forward move for a merging two entities hence calling for analyzing, interpreting and communicating this information to the stakeholders (Maryanne M. Mowen, 2015) .
References
Maryanne M. Mowen, D. R. (2015). Managerial Accounting: The Cornerstone of Business Decision-Making at Fiat Chrysler Automobiles N.V. Chicago: Advent Press.