Apart Apart from that, it also provides an accurate

Apart from that, activity-based costing also is a management accounting information which can create organization success. According to CIMA (2013), it stated that activity-based costing is a method to the costing and monitoring the activity which assigns the overhead costs to activity based on the resources consumption. For instance, the costs are assigned to different activities such as manufacturing and these activities are then associated with different services and products.Based on Aranoff E(1998) said that the activity-based costing can prevent the cost distortion. In order to avoid the cost distortion, activity-based costing can apply several cost pool and cost driver. According to Clifton K (2012), cost drivers are the events that lead to an increase in the cost of an activity. Besides that, activity-based costing also helps to reduce the wastage or activity which do not provide any value to the organization.   According to Monte R (2000), it stated that organization can effectively implement the market strategies by using the activity-based costing. As a result, it can helps to determine the actual market price and make the sound decisions. For example, decisions about marketing, quantity of product to produce, make the product efficiently and pricing. It also provide more accurate of the cost data and even leads to more accurate decision such as when the company is making the pricing decisions. Accuracy cost data leads to increase profitability and efficiency of the organizational of a company. Based on Andrew H(2005), activity-based costing allows the organization to concentrate on the activities and products by tracing the cost drivers. Hence, the revenues generated by the company will increase and the operating performance will be improved. Apart from that, it also provides an accurate understanding of product cost among the complex multi production company. With the understanding of other companies, it provides a competitive edge in a particular market. The product costs achieved in the activity-based costing are more accurate in order to provide the possible benefit at the lower cost. Other than that, the company can obtain better information about the activity costs. Based on Marx C (2009), activity-based costing is developed to trace the activity cost to different cost objects. This will assist the company to identify the value to the company of different cost objects and ensure the activity costs are linking to company standard. For instance, it can trace the profits generated based on geographic areas or category of groups. Moreover, according to CIMA (2013), activity-based costing enables to find better ways of allocating and eliminating the overhead costs. A proper allocation of overhead costs will help the organization to determine their product line and the whole subsidiaries. Allocation of overhead cost not only can helps to determine the profit margin, but also can increase the operational performance based on the actual consumption of resources. Hence, it can assist the company to determine their position and the highest margins which the company can earn and achieves in future. Instead of allocating the overheads, it also can improve the customer profitability. The cost usually incurred for customers are product costs and also overhead costs such as unusually high customer service level and product return handling. Activity-based costing can help the organization to determine whether the customers are earning a reasonable profit in the organization. In addition, it can avoid the company making losses when selling their products. The company can use activity-based costing to determine the minimum cost of the products before it sells in the market. The overhead cost should be included as part of minimum cost depending on the various situations which the products are being sold. Instead of marginal costing and activity-based costing, cost-volume-profit (CVP) analysis also is a management accounting information which can create organization success. According to Hansen (2007), the cost-volume-profit analysis is a method for planning and decision-making. It shows the interrelationship of price, the quantities of goods sold and costs of producing goods. According to Weygandt (2009), it said that CVP analysis is the study of the outcomes of changes in price and volume on the revenue of the company. It is used to make the decisions like placing the selling prices and to determine the product.  According to Diana (2004), CVP analysis serves as a price determination. For example, if the business is unable to run below the price which set by the competitor, they will reduce the fixed cost and variable cost to the products’ price or terminate it. Other than that, CVP analysis help to determine the product cost. The company enables to form the prices to the sale volume. Besides that, CVP analysis enables the company to understand the relationship between the cost of the product, quantity sold and profit generated. It will affect the decision made by the organization such as making or purchase decision, choosing the best distribution way, and the pricing policy as well as the production methods.Moreover, it also assists in evaluating the outcomes of change in costs and volume. The aim is to review the costs incurred and the profits earned by the organization. For instance, the company should decide whether to increase the fixed cost or lower the variable cost to make the same profit levels. In addition, it also can help the company to select the sales levels which will achieve their targeted profit. Preparation of a budget will help to achieve the organization’s profit. In the budget, it will indicate costs of the product and the expected revenue during the production process. Hence, it prevents the company suffers loss from the sales.

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