May be used with either a job order or a process costing system. Benefits: (1) More (1) product costing with more cost pools, for better management decisions, and (2) improved cost data regarding an activity may lead to reduced costs for that activity to obtain the cost data, and (2) ABC does not eliminate Limitations: (1) (2) (3) ABC makes managers realize that activities, not products, ultimately determine overall company (4) allocations. O (1) accurate, (2) expensive, (3) arbitrary, & (4) profitability (1) accurate, (2) inexpensive, (3) arbitrary, & (4) profitability (1) accurate, (2) expensive, (3) arbitrary, & (4) success (1) inaccurate, (2) inexpensive, (3) arbitrary, & (4) profitability
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
1
Step by step
Solved in 3 steps
