Accounting Treatments for Identifiable Intangible Assets

Executive Summary

Through extensive analysis of your firm and the costing system you currently use, we believe that your current costing system, that being a traditional costing system isn’t satisfactory for your company anymore. We believe that a change from this system to an activity based costing system would be of significant advantage to your company.

Your company is currently using a system that uses a plantwide overhead rate based on output volume to allocate factory overhead costs to the products, that is only useful when direct labor and materials are the only predetermined factors of production. ...