Activity-Based Cost Reduction Information in Governance Coursework

Activity-Based Cost Reduction Information in Governance - Coursework Example The board members are responsible for setting the organization’s goals and strategies to achieve them within the given period (Carver, 2011). This requires board members to have full information concerning products and services they intend to produce. The board members are responsible for budgeting for the resources the organization will require in the production of specific commodities. The information about resources required for the production process is essential because the board is aware of exactly what to produce in terms of quality and number of units of each product they will produce (Firstenberg and Schoff, 2009). The information also relates to the time in which the board members expect to raise the required resources and when they will complete the production process. The board will be able to determine the area of the shortage of resources for the completion of the production task for each activity or service and will decide whether to reduce the number of units t o be produced for each commodity or whether to add more resources in order to produce the targeted quantity (Carver, 2011). Since charitable organizations aimed at meeting specific needs of the society, activity-based costing will help the board members to establish a base for mobilizing more resources from financiers of the organization to provide essential goods and services in the society. The work of auditors is to obtain proof of the efficiency in which organization has utilized its resources. The auditors use activity-based costing information set by the organization’s board to make a comparison of what the board has actually produced in relation to what the board had planned to produce (Carver, 2011). The auditors will attest the value of each product or service in relation to the expenditure set by the board.