Functionalities and benefits

1. activity based costing- process of calculating the cost of products that accounts for indirect costs

Benefits
It gives you a realistic and more accurate production cost of specific items

It allows you to assign specific overhead costs to more expensive products

It allows you to evaluate the efficiency of productions and make improvements

2. product costing- is the process of assigning costs to inventory and production based on the
expenses that go into producing or buying inventory.

Benefits
Accuracy

Project tracking

Decision-making

3. profitability analysis- analysis of cost and revenue of the firm which determines whether or not
the firm is profiting

benefits

allows companies to maximize their profit

useful and essential for growing companies.

4. variance analysis- Variance analysis is the study of deviations of actual behaviour versus
forecasted or planned behaviour in budgeting or management accounting.

Benefits
Competitive advantage

Identifying the changes required in the business strategy

Identifying any managerial concerns

5. cost budgeting- A budget serves as the roadmap to accompany your business plan. It’s a working
document outlining start-up capital, expected revenue, and expenditure.

Benefits
Provide targets for growth
Improved focus based on facts
Manage cash flow more efficiently
Monitor performance and progress
Allocate resources more appropriately