Role Activity Based Costing in determining of optimal product mix Reliance Linear programming model
Study comparing Between Traditional method and Activity Based Costing
To The council
Of College of Administration and Economy
University of Karbala
In partial Fulfillment for the Requirements
For the Master Degree in accounting
By
Reeda Jamel Seed
Under the Supervision of
DR. Mohammed A. A. ALshammary
Abstract:
The problem of this research comes with the result that the depending on traditional approach based on the volume in allocating overhead costs to produced units will lead to unreal charging of overhead costs to produced units, then distortion of cost per unit of each product, and that will lead the management to cannot choose optimal product-mix, and will focus on the efforts improvement in wrong operations, and that is trace substantial reduction in company profitability.
This research aims to showing role of an activity-based costing method in determining of optimal product mix through reliance on linear programming model and its comparing with traditional approach using programs statistics as program Minitab in prediction for sales period future and program Win QSB using into solve problem linear programming and analysis resultants .
The main conclusions of this research were into allocation process overhead costs on based one average charge in traditional approach will lead to un objectivity and unreal in allocation process overhead costs this is side and from side other will lead the management to cannot choose optimal product-mix , also indicate research concept activity-based costing method its more objectivity able on connect cost product with activities that cause costs by means of cost drive in conformity with consumption every product from cost drive .
The Research Arrived at a set of Recommendations amongst Which , application activity-based costing method in research sample factory for allocation overhead cost result provide information suitable about product cost unit , application linear programming in research sample factory for determining of optimal product-mix .
