Exec Summary and 3

Exec Summary and 3 - Executive Summary As a consultant for...

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Executive Summary As a consultant for the STC company, our team worked diligently and proceeded to the solution that said STC company should use the ABC system with multiple cost drivers over traditional single cost driver system. We figured, after analyzing both systems, the proposed ABC method improved the accuracy of the job costing within STC. Since the current costing system is single allocation based, costs lead to under-costing of high volume products and over-costing of low volume products. This means that the volume is not correctly reflecting each individual product the company chooses to produce. With manufacturing overhead being charged to all the products under the traditional method, some relatively cheap products are accounted as lower costs to manufacturer even though their volume is great. All the while, some expensive products have elevated costs to manufacturer due to their low volume. Because the proper costs are being
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Exec Summary and 3 - Executive Summary As a consultant for...

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