Assignment: Discussion-Cost-Allocation Methods
According to Zelman, McCue, Glick, and Thomas (2014), activity-based costing (ABC) requires increased attention as compared to traditional, top-down cost-allocation methods. The assumption for ABC is that activities consume resources and products consume activities. Equally, the assumption is that if you can control activities or processes, then you can also control costs. The supposition is that if you can measure the resources an activity consumes, then you can provide a more accurate picture of costs as compared to the traditional, top-down cost-allocation method (Zelman et al., 2014).
In this assignment, you will compare and contrast traditional, top-down cost allocation and the ABC methodology. Using the module readings, Argosy University online library resources, and the Internet, respond to the following:
- Describe traditional cost allocation.
- Discuss costing terminology (direct costs and indirect costs) and cost drivers.
- Identify the steps in ABC.
- Discuss the differences between the ABC method and traditional cost allocation. What are the pros and cons of both ABC and traditional cost allocation?
- In your opinion, is the ABC method better than traditional cost-allocation methods? Why or why not?
Give reasons to support your statements.
Write your initial response in approximately 300-500 words. Apply APA standards to citation of sources.
Assignment: Capital Assets-Lease versus Purchase Analysis
Review the following scenario:
Healthcare organizations face the challenge of acquiring capital to finance equipment purchases. As the Director of Rehabilitation Services in a hospital outpatient clinic, you have identified the need to acquire new isokinetic exercise equipment. You are preparing a briefing for the Assistant Administrator to discuss lease options versus purchase options for an exercise equipment system that would cost $25,000 to purchase. The useful life of the equipment is 5 years.
Based on your analysis of the scenario, the module readings, Argosy University online library resources, and the Internet, address the following:
- Describe different leasing options.
- Discuss the advantages and disadvantages of lease versus purchase.
- Make a decision about lease or purchase and present that option to the Assistant Administrator.
- Summarize the central factors that shaped your decision to recommend lease or purchase.
Write a 3-5-page report in Word format. Utilize a minimum of 2-3 scholarly sources in your research. Your paper should be clear, concise, and organized; demonstrate ethical scholarship in accurate representation and attribution of sources; and display accurate spelling, grammar, and punctuation. Apply APA standards to citation of sources.