Dear CEO, This is regarding the previously mentioned issue that it is to help the organization to move from conventional strategy to Activity based costing for assignment of assembling cost as there are a portion of the issue with customary technique which, ABC costing appears to give arrangement in my view. Some of the problems with a traditional method is expenses are identified with cost focuses and henceforth not sensible of cost conduct, retention costing underscored on all out expense to be specific both variable and fixed, and it isn't so helpful for the executives to use to settle on choice, arranging and control. Also, the accentuation is on all out cost in this way the cost volume benefit relationship is ignored.This brings about settling on choices based on instinct. I might want to reason that absorption costing is the conventional cost bookkeeping strategy that centers around the item or administration when fixing costs. It works under the basic methodology of allocating assets to items or administrations straightforwardly while Activity based costing is an advanced cost bookkeeping approach that centers around exercises as the central expense. ABC presumes that items or administrations expend exercises, and exercises devour assets. It in this manner, attempts to change over backhanded expenses into direct expenses. Assimilation costing finds out the general productivity or proficiency of the assembling framework yet neglects to give the genuine expense of individual item units. Lastly, contrasting adaptation costing and activity-based costing, action based costing improves the nature of the board bookkeeping data, particularly in enormous and multi-item activities where traditional overhead distribution strategies, for example, assimilation costing may create deluding results. Thank you for your time and I hope you consider my opinion.

When you reply: You are the CEO and you don't think activity based costing is as good as its made out to be. Write a memo back to the Controller with the issues you believe the company would have if they made the switch.