Question_2c

Question_2c - Question 2c and additional paragraph...

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Question 2c and additional paragraph Evaluation of Traditional and ABC Costing Methods Our calculations indicate that the multiple allocation base system improves the accuracy of the firm’s job costing. However, this brings us to the question of whether or not the system is cost effective to implement. We believe that the multiple allocation base system is cost effective based on the current availability of data for determining activity rates. To determine the firm’s activity rates, four cost pools and three cost drivers are used. The four cost pools include: continuing professional education costs, administrative costs, client development costs, and unassigned professional staff time costs. The three cost drivers include: direct labor hours charged to a service area, number of jobs in a service area, and direct labor dollars charged to a service area. The data for these cost pools and cost drivers is currently maintained by our accounting system’s software. Therefore, the costs to
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This note was uploaded on 03/08/2009 for the course ACCT 250B taught by Professor Shames during the Spring '08 term at USC.

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Question_2c - Question 2c and additional paragraph...

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