Analyzing Customer Profitability Using Resource Consumption Accounting For Improving Firm Performance

Accuracy and quality of customer cost information depend on the selection and execution of a contemporary strategy to cost accounting and administration that is responsive to fierce competition between economic units and incorporates resource consumption accounting. RCA, the latest generation of cost accounting and contemporary management software, enables managers to make informed choices and establish effective plans. This research intends to illustrate the influence of resource consumption accounting in rationalizing customer costs in the bags / Hilla facility by lowering product prices, detecting idle energy, and identifying the factory's best customers. In the Al-Hilla / Al-Hilla / Al-Hilla plant, a case-study technique was applied. Through this process, an evaluation of the laboratory's actual expenses and the application of resource consumption accounting are made using the laboratory's existing data for the year 2018. The research concluded that the effectiveness of customer cost analysis is contingent on the technique used and that accounting for resource consumption is one of the most effective and accurate methods for cost rationalization. The resource consumption accounting highlights the economic unit is resources, the entwined relationships between them, and their optimum usage. Furthermore, it finds idle (untapped) energy and eliminates it from goods and services to minimize prices. Thus, the researcher's most significant suggestions affirm that enough attention is given to the application of resource consumption, accounting for their contribution to attaining this aim.