Glaser Health Products Coursework Example | Topics and Well Written Essays - 500 words

Glaser Health Products - Coursework Example In most situations, these costs are part of recurrent expenditure treated as a liability in the company’s profitability index.In as much as production costs are characterized with a multiplier effect on the overall performance of the company, their increase in efficiency is always added to the value of production and increases the profitability of the firm.In order to trace various costs to activity groupings, arbitrary allocations of overheads to products, services, and consumers will be vital. At the first stage, there will be the derivation of the activity cost pool. These will consist of costs such as; material handling, procurement, and set-up. While the second stage will be made up of; costs per material movement, costs per purchase order, and costs per set-up.In primary stage cost drivers in relation to products, one needs to employ the use of activity drivers by assigning the activity costs to outputs on the basis of the consumption and demand for the outputs. All the outputs will be identified on the performance of an activity segment which consumes resources(Barrett, 2005). It is necessary to use preliminary and primary stage cost drivers because they aid in assigning resource costs to activities.This is done in three main ways which include; direct, indirect, and general/administrative costs. Direct costs consist of such costs that are traceable directly to one output such factory painting and repairs in the factory and other coats of production.