Abc Costing Method

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... | |Learning outcomes |At the end of this course, students are able to: | | |Compare and explain about costs and the best ways to make better decisions in the selection of products, price and investments. [C4] | | |Prepare and produce a budget, understand chain processes and apply the said techniques. [P4] | | |Utilise strategic costing, understand and implement ways to review inventory and quality, and measure the performance of | | |processes/systems. [A3] | | |Show teamwork skills in applying strategic costing and performance measurement. [TS] | |Student learning |Lectures | |time |28 hours | | | ......

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...November 7, 2012 Writing Assignment 2 ABC Costing 1. Briefly describe the ABC system adopted in Super Bakery. The ABC system implemented by Super Bakery was done to separate costs by customer instead of allocating overhead evenly across the entire customer base. Their reason for doing this was simple; they wanted to see how profitable each customer was. In the nature of this business, it is described in the article that “…very few customers’ orders consume the same amount of resources.” (Davis 4) Because of this reason, different customers produced different amounts of profits, and this is one reason that Super Bakery adopted an ABC system. Another reason this company adopted the ABC system was to track outside contractors. The business is a virtual corporation, and the people who work for them often have the power to make more decisions. If they are too free to make these decisions on their own, it often happens that they try to do certain things with money to make their job easier. While doing this, it could be hurting the virtual company at the same time. With an ABC system in place, the type of spending brokers, contractors, and other outside workers is monitored closer and can be tracked more easily. 2. Do you think it is necessary to adopt an ABC system in Super Bakery? Why or why not? What are the benefits/costs? I believe that with this type of business, it is absolutely necessary to have an ABC system in place. Because of the way this......

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