Within the Discussion Board area, write 400-600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
It is important for management to understand how different departments and customers contribute to the profitability of a company. Profitability is comprised of both price and costs. Costs can be allocated using a variety of methods. Understanding cost flows and the various methods of allocating costs is important in ensuring profitability.
- Evaluate potential cost allocation methods that would impact an organization’s selling prices, and provide examples.
- Communicate decisions faced when collecting and allocating indirect costs to customers, and provide examples.
Elaborate on why costs for one customer might be different from that for another customer being sold the same product or service.
Responses to Other Students: Respond to at least 2 of your fellow classmates with at least a 200-word reply about their Primary Task Response regarding items you found to be compelling and enlightening. To help you with your discussion, please consider the following questions:
- What did you learn from your classmate’s posting? What additional questions do you have after reading the posting?
- What clarification do you need regarding the posting?
- What differences or similarities do you see between your posting and other classmates’ postings?
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