| Category | Assignment | Subject | Management |
|---|---|---|---|
| University | University of West London | Module Title | AC50027E: Management Accounting |
EON and Brothers Ltd is one of the leading manufacturing organisations who are having some new products to be launched in the market. However, they are considering the traditional costing system, and the report will explore the benefits and the drawbacks of the system along with the estimation of the cost per unit using the same. The traditional costing system can be considered a straightforward way of dividing the total overhead cost either based on the labour hours or the machine hours consumption of the product. The implementation of activity-based costing will have a complex nature, as each of the activity costs cannot be determined accurately. Further, for the calculation of the activity cost, the activity cost driver and others will take a lot of time and effort. EON and Brothers Ltd Has a pricing policy of charging a 75% markup on the cost of production for the product pricing. Here the company was under-pricing their product “Alfa” and “Sigma” by £22.87 and £0.80 respectively.
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