Principles of accounting Research Paper Example | Topics and Well Written Essays - 500 words

Principles of accounting - Research Paper Example This essay focuses on the principles of accounting in business. Accounting refers to a well-organized recording, coverage, and examination of monetary transactions of a venture.The area of concern in this paper is the use of Activity-Based Costing In brief, ABC refers to a costing system used in assigning costs to various goods and services in the business world (Grossman & Livingstone, 2009). In this paper, Super Bakery Inc. acts as a practical demonstration of how the system can determine the costs in a real life situation. Historically, ABC came into use in the 1980s due to lack of reliability of the traditionally used methods of cost accounting (Mansor, Tayles, & Pike, 2012). The need to use ABC was due to dynamics experienced in business due to technological advancement and development. What strategies did the management of Super Bakery, Inc. use? Super Bakery, Inc is a company making and selling doughnuts. In order to maximize the company’s profits, the management came u p with a strategic plan of managing its resources (Drury, 2008). The core functions of the venture are performed inside the company’s premises, while the other activities, such as selling, take place through external sources. To run the outsourced partners smoothly, the company has established a well-drawn workflow to each affiliated company. Outsourcing is a strategy used to reduce the number of employees for the purpose of spending less money on human labor. Super Bakers strategy is successful, since the sales are higher than they were before the implementation of the strategy.