ACC445 P1T2 IP due 1-16-07 costing systems

ACC445 P1T2 IP due 1-16-07 costing systems -...

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ACC445-0701A-01 Cost Accounting Cara Estes Phase 1, Task 2 – Individual Project Due: 1/16/07 There are 3 common types of costing systems, 2 traditional and 1 refined. The traditional costing systems are the job-costing system and the process-costing system. Both of these systems cost items by volume, so the results can end up over-costing some products and under-costing others. The net effect is useful for financial reporting, but they are not effective for management to use for analyzing costs and budgeting. The job-costing system is when a company has several items they produce, and process-costing is used when a company produces only 1 product. Between the two, SSOG would use the process-costing system for their financial reporting since their process flow is combined for both types of juice until the last step The activity-based costing (ABC) system ‘refines’ costing systems to allocate costs to specific activities and cost objects. The main differences between traditional and activity-based costing systems are that traditional costing systems are volume based and historically oriented, while activity-based systems provide more realistic product costs by identifying different cost activities and are more forward looking. The traditional systems are mainly used for financial statements because they provide consolidated costing on activities and time periods that occurred in the past. The ABC system provides relevant, detailed information to managers regarding each step in cost-generating
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This note was uploaded on 11/05/2011 for the course ACCOUNTING 101 taught by Professor Online during the Spring '11 term at Colorado Technical University.

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ACC445 P1T2 IP due 1-16-07 costing systems -...

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