Xijun Q. (2013, June 11). Activity-based Costing (ABC).

CGMA. https://www.cgma.org/resources/tools/essential-tools/activity-based-

costing.html

Activity-Based Costing is an essential accounting tool. The author describes ABC as a

model used to recognize the relationship between two types of costing approaches. It's assigned

to the overhead that will be used, such as manufacturer's products and a secondary factor. It's

within the model tradition to have arbitration and application, especially in the production

process. It has a wide range of applications epically in final departments. In this case, it can be

used to determine salary and production services. It's very critical since it helps decide cost

drive, purchase process, and attaining the best pricing approach. In the determination stage,

there is close identification of activity, dividing the movement in pools, and later accounting of

the activity cost involved. As depicted in the article, it's mainly applied in advanced and

professional accounting.

Lesson learned

From the article analyzed, I have learned that Activity-based Costing significantly helps

the costing process by expanding the cost pool numbers used in analyzing overhead costs.

Besides, it extends a diverse method of indirect damages traceable based on the accounting

element being worked on. Moreover, it creates new based assignment roles whose allocation is

generated from the volume measure and direct labor costing.

Managerial application
 It's a defined method that provides the most accurate production costing. In this case,

manger uses it in the decision-making process and increases the visibility of non-value-added

organizational models.

Master budget

Steven Bragg. (2017). 7.2 master budgets | Managerial accounting. Lumen Learning – Simple

Book Production. https://courses.lumenlearning.com/sac-managacct/chapter/master-and-

fleible-budgets/

Steven Bragg describes masters budget as an aggregation of all budget produced by a

firm or organization its various units and departments. On the broader scope, the budget contains

functional areas such as financial statements and cash forecasts used in the financial planning

procedure. As the article outlines, MB is prepared in a given series of time. It can be developed

in quarterly, monthly, or based ion the fiscal year. Therefore, it's the central planning tool that

helps a firm make decisions and financial direction. It must account for all the corporate and

allocation that has been issued within the period. There is a critical element that the senior

manager will be looking for in the master budget. Some of the factors include direct labor

outline, material outline, and overhead and seeking administration expense. Accounting

principles, in this case, must be followed to attain the best result and strict standard.

Lesson learned

Budgeting has a diverse application in a typical working environment. It has powered

my great skill in the analysis and evaluation process. As a financial analysis, one must have a

deep understating of variance and overhead. On the same note, advanced technology,
innovation, and inventions have been strongly enhanced. The development of software has

standardized good inventory through the standard formula and working design.

Managerial use

The described concept is very critical to every manager. In this case, it's used in the idea

to perform the evaluation and accountability of the firm effectively. Besides the composition

plan, it’s applied as a decision-making kit.

 References

Steven Bragg. (2017). 7.2 master budgets | Managerial accounting. Lumen Learning – Simple

Book Production. https://courses.lumenlearning.com/sac-managacct/chapter/master-and-

fleible-budgets/

Xijun Q. (2013, June 11). Activity-based Costing (ABC).

CGMA. https://www.cgma.org/resources/tools/essential-tools/activity-based-

costing.html