Activity-Based Costing Research Paper

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Recommended: Empirical review on activity based costing

This paper is going to identify three type of companies that use different costing systems (job costing system, process costing system, and activity-based costing allocations (ABC) ). Also, this paper is going to compare and discuss the similarities and differences you see in the companies. Deloitte & Touche is one of the well-known auditing and consultation companies that provide services that vary due to thee requests and the needs of the customers. That means all costs related to the service provided to the customer will be charged on that service and no transfer of the cost of the service to any other stage because services are provided according to the costumers' orders. Therefore, job costing system is the appropriate costing system for Deloitte & Touche . Wrigley is a company that produces Gum; and it is …show more content…

Assign overhead costs to the activities identified in step 1. 3. Identify the cost driver for each activity. 4. Calculate a predetermined overhead rate for each activity. 5. Allocate the overhead cost to the product (Heisinger, K., & Hoyle, J, (n.d.), para.12). In summary, the costing system a company adopts is controlled based on the nature of the production process and the link between the production stages. All of the costing systems deal with allocating the cost of material, labor, and overhead. However, the allocating process differs from a company to another due to the nature of the production process and the link between the production stages as clarified above in the applied examples of the job costing system, process costing system, and activity-based costing allocations (ABC). References Heisinger, K., & Hoyle, J. (n.d.). Managerial Accounting 1.0 | FlatWorld. Retrieved from https://catalog.flatworldknowledge.com/bookhub/reader/4402?e=heisinger_1.0-ch03_s03 Product Cost Flows in a Process Costing System. (n.d.). Retrieved from

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