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Accounting
ABC at Netflix
To; CEO Netflix
From; XXXX
Re; Move to Activity-Based Costing (ABC)
Activity-based costing has the potential to increase transparency in accounts, compared to absorption costing. Activity-based costing breaks down of the different tasks into the different elements, determining the costs of each activity to create a product or service. This breakdown of costs can them be used to allocate costs for the production process and give an accurate picture of the costs associated with producing each item or serving each customer (Innes & Mitchell, 1998).
Variable costs are easy to allocate to the different products or customers, the greatest value from activity-based costing is the way that fixed, or indirect costs, can be assessed and allocated based on the actual usage. Netflix may benefit from this approach due to the high level of fixed costs and low level...
The ability of the firm to assess costs for the service provided, such as serving each customer each month, may allow for better quality input information to the pricing decisions (Innes & Mitchell, 1998).
There are a number of fixed costs, or indirect costs, that need to be assessed. By looking at some of these costs and how they may be allocated in line with activity-based costing the value of the system may be realized. The breaking down of the costs will then allow the firm to assess the cost associated with each customer. These five examples utilized maybe argued some of the most critical to the company's success, as they deal with the main operational aspects of providing content, delivering it to the customers, collecting payments, looking after customers as well as ensuring the company's reputation is maintained for security. If any…
This paper is a discussion on Activity-based costing (ABC), one of the costing methodologies used in business. The methodology essentially entails assigning a cost to the various activities of an organization, which range from planning and production to quality control, logistics, and distribution (Kaplan & Anderson, 2007). It also entails determining the amount of time required to perform the activities (Kaplan & Anderson, 2004). The cost and time are then
Netflix External and Internal Environments Netflix is a video rental store that was founded in 1997 in Scotts Valley, California by Reed Hasting and Marc Randolph. The corporation’s business model is centered on mailing DVDs to its customers as well as providing online rental of videos. For its mailing services, Netflix uses its 35 warehouses across the United States. Since its inception, the company has continued to leverage on technology to
E-Marketing Strategies at Apple Orchestrating rapid new product development cycles that in many cases deliver products and services that create new markets, while at the same ensuring the continual strengthening and fidelity of a global brand is a daunting strategic challenge. Incorporating the most effective approaches to Integrated Marketing Communications (IMC) strategies today across a spectrum of established and emerging e-marketing channels must be managed with goals in mind first,
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66). Furthermore, social software will only increase in importance in helping organizations maintain and manage their domains of knowledge and information. When networks are enabled and flourish, their value to all users and to the organization increases as well. That increase in value is typically nonlinear, where some additions yield more than proportionate values to the organization (McCluskey and Korobow, 2009). Some of the key characteristics of social software applications
Amazon's cloud computing (AWS, EC2) solutions; paper analyze competitive position Amazon's cloud computing solutions industry recommend strategies strengthen firm's competitive position international context. Amazon's cloud computing (AWS, EC2) solutions Cloud computing services which are accessed directly over the internet are gaining popularity in this technology age. Industry experts have referred to it as a game changer and it has been shown to give companies competitive advantage through giving them a unique selling