11-27-09-FINAL - Individual Project 1 Running head COSTING...

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Individual Project 1 Running head: COSTING SYSTEMS. Phase 1: Cost Accounting Systems. Claudia Pelaez Colorado Technical University Online ACC445-0904B-01: Cost Accounting Instructor: Jason Cade November 23, 2009
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Individual Project 2 Different costing systems available to Sun Shine Orange Grove Costing is an important process that allows companies to analyze all its expenses incurred in the manufacturing of its products. Based on the type of industry, companies choose the appropriate type of costing system. Among the different kinds of costing systems existing for businesses nowadays I can talk about the following: Activity Base Costing (ABC) system: This method was introduced in the United States in the 70s and the 80s. This is mainly used by companies that have a highly automated process and a broad diversity of goods. Companies using this system have the ability to allocate costs more accurately to its products. The expenses incurred to produce final goods are identified based on the amount of resources used. Final goods which use more costly set-up time or more machine time will have higher prices. Companies with high volume products, its expenses are more competitive since they require less set-up costs and machine and manpower time. Back Flush costing method: companies using just-in-time (JIT) production systems also use this costing method. Under this method the costs that a company has are proportional to its inventory. Companies that use this method eliminate most of the time accounting records. The majority of the manufacturing costs become direct product costs and hence fewer cost allocation are necessary. Traditional costing systems: Under this system we’ll find: Job costing system: under this method costs are gathered by jobs or batches. Every
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Individual Project 3 single batch has to be different among the other ones. If batches were all identical, another type
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