DBA handles all your manufacturing accounting processes with its own general ledger. The major benefit of the DBA accounting system is that it absorbs actual labor and manufactured overhead costs into the costs of finished items. Labor and overhead absorption is DBA's required costing method for the following reasons:
- Absorption costing is a natural byproduct of DBA’s routing architecture, which breaks out labor into processing sequences with setup hours and cycle times.
- Absorption costing is used by virtually all routing-based manufacturing systems.
- Absorption costing is the only costing method that provides a complete and realistic cost profile at the individual item level.
- Complete and realistic item cost profiles enable better pricing decisions and profitability analysis.
- Absorption costing is based on sound accounting principles and complies with GAAP and IRS requirements.