In any business, costing is sacred; regardless of how big the business is. Nevertheless, every business is interested in in minimizing costs in order to maximize profits as one of the best sustainability strategies in the modern highly competitive world of business. However, a costing system is required for this purpose. A costing system can be defined as a system designed to be used by a company to monitor the costs it incurs, including a set of processes, controls, reports and forms used to create an aggregate of costs and revenues with the primary purpose of enhancing the profitability of the business. Essentially, systematic allocations of the costs in a business are organized in the form of costing systems (Epstein & Buhovac, 2014).
These are actually some of the most important introductory sentiments identified by the students in my group. Additionally, another student emphasized the fact that decisions by businesses should be aided by the identification of costs and benefits of projects, such as costs like environmental, economic, and social costs, and their subsequent impact on the business. Budgeted figures are often used for costing of the products or services since actual prices unknown. This report critically explores the different types of costing systems proposed by the members of the group, particularly with focus on the advantages and disadvantages of each in order to compare and contrast them (Epstein, 2008; Epstein & Buhovac, 2014).
Life-Cycle Costing (LCC) or Life-Cycle Assessment (LCA)
Unlike other costing systems, life-cycle costing or life-cycle assessment take into account the costs experienced during a cost object’s entire life cycle, particularly from the point of conception to its demise. Bot...
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Farr, J. (2011). Systems Life Cycle Costing: Economic Analysis, Estimation, and Management. CRC Press; 1 edition
Fisher, J. G. & Krumwiede, K. (2012). Product costing systems: Finding the right approach. The Journal of Corporate Accounting & Finance
Paladino, B. (2011). Innovative corporate performance management: Five key principles to accelerate results. Hoboken, N.J: Wiley.
Sharfman, M. & Fernando, C. (2008). Environmental risk management and the cost of capital. Strategic Management Journal, 29(6), 569–592
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