Advantages Of Hybrid Costing System

1211 Words 5 Pages
Research Report
Management Accounting ACF2200

Name:Qing Liu
ID: 24945722
Quantity of Word: 1094

Table of Content
1.0 Social Enterprises ----------------------------------------------------------- 01
2.0 Hybrid Costing System ------------------------------------------------- 01
3.0 Benefits of Hybrid Costing System ---------------------------------- 04
4.0 Reference list --------------------------------------------------------------- 05

1.0 Social Enterprise
1.1 Definition
According theory, A social enterprise is defined as operating business to impact social(). iCare company is social enterprise. Because it operate with low profit, even it is operating at loss in 2015. And its aim of operating is to stimulate market
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Social enterprises is operated for creating social value. It can ignore profit to provide the best products or services as they can. But traditional enterprise focus on customer value and shareholder value. More specifically, traditional enterprises focus on profit. They may ignore others which are not included in profit earning. For example, Roche company received feedback that there are some problem in their medical products can cause people illness even death. But the company did not discover the problem until it was discovered by …show more content…
And managers only can know each batch of eyeglasses cost rather than each type of glasses cost. By using hybrid cost system, is much helpful to control and analysis cost like Forrest gump analysis the acounting in motion picture industry.

3.0 Benefits of Hybrid Cost System
There are two major benefit of hybrid cost system for iCare. Cover loss is the first one. It can be used to consider which part should be cut the cost mostly. And the part of loss also included. Though iCare is a social enterprise, it still need money to purchase material, repair machine and pay to workers. If there always operating with loss. The iCare will not have enough equity to pay for costs like labour salary and cost of material. Then this social enterprises may have no choice but to close for there is not enough capital to operate. The second benefit is helping people understand why iCare needs donation as non-profit social enterprise. iCare can show their cost of product and sale to compare the revenue. Because external people may ignore the cost but focus on revenue. If show the cost of product, quantity of product and the price of product, they may understand why iCare needs their donation while iCare received money from sale. And they may think their donation is used for actually needs rather than

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