Cost Accounting and Transparency

How do German Companies Run their Cost Accounting Systems Student’s name Department: University Course: Course Code Instructor’s name Date How do German Companies Run their Cost Accounting Systems Example of Variable Overhead: A variable overhead is typically the cost associated with a given business or company, that is subject to the day-to-day changes in production. This essentially means that the operating costs within the company keep changing based on the amount or level of business in question. Examples of variable overheads include cost of electricity and daily wages that a firm incurs. The videos provide an example of variable overhead, such as the cost of utilities. These include such as electricity for machinery, which varies as the production level changes. Reasons Behind Differences in German and U.S. Cost Accounting: German cost documentation systems, like Grenzplankostenrechnung (GPK), focus on activity control at the lowest levels, fixed and variable costs, and support short-term decision-making at cost centre levels. Additionally, the German system mainly focuses on management accounting more than the U.S. system. On the other hand, U.S. companies generally assign overhead according to direct labor, resulting in incorrect cost allocation and limited insights. There are certain costs for which t...