ACC 340 Discussion 3
The company I wanted to discuss is Samsung. They make mul ple products. The main three are cell
phones, televisions, and appliances. Each product line brings in big pro ts for Samsung. Using Ac vity
Based Cos ng is the best way to allocate overhead accounts for Samsung. Their overhead accounts,
indirect expenses required to run the business but not for produc on, are adver sement, rent, u li es,
and insurance to name a few. The advantage for Samsung to use the ABC method is that there would be
be er more accurate cost evalua ons. "It assumes that costs are assigned based on resources
consumed, so that resource costs are iden ed and then assigned to products based on their use of
those resources." (Bragg, 2011) The disadvantage would be the complexity of gathering the data to
repor ng en es. (Bragg, 2011) If the company is not careful in monitoring the overhead cost it can get
out of control with unnecessary spending and deplete funds, taking away from pro ts.
References:
Bragg, S. M. (2011). The Controller's Func on: The Work of the Managerial Accountant (4th ed.)
Hoboken: Wiley Professional Development (P&T). Retrieved from
h ps://mbsdirect.vitalsource.com/books/9781118482537