Nowadays, more and more machines are used in the production, the use of direct labor has decreased, and depreciation has increased. Activity-based costing (ABC) is mostly used in the manufacturing industry since it enhances the reliability of cost data, hence producing nearly true costs and better classifying the costs incurred by the company during its production process.

Assume that your client company uses job costing; you, as a consultant, are writing a memorandum to your client company and recommending ABC. In this writing assignment, please describe the reasons and benefits of changing to ABC.