Assume that you are working as an accounting manager of one of the reputed companies of Muscat and you met one of your friend in a business conference who is also working as a financial manager

Q1. Assume that you are working as an accounting manager of one of the reputed companies of Muscat and you met one of your friend in a business conference who is also working as a financial manager. The business conference was on “The use of cost and management techniques in decision making”. Based on the conference discussion, in lunch break your friend was discussed with you that, there are several different methods that accountants and bookkeepers use to manage the financial aspects of businesses. One of these methods system is an accounting method that is used to predict profits. This method uses cause-and-effect techniques and takes into account direct and indirect costs and expenses in a business. In order to determine the total cost of an end product, under this approach, the indirect costs are allocated and apportioned. They also discussed on the costing method that assigns overhead and indirect costs to related products and services. This accounting method of costing recognizes the relationship between costs, overhead activities, and manufactured products, assigning indirect costs to products less arbitrarily than traditional costing methods. At the end they came to know that both the discusked methods have their own advantages and disadvantages and after the lunch break all the participants disbursed. Based on the above paragraph, Identify and explain about the costing methods you and your fried discussed on. Explain the Pros and Cons of both the methods.

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