Post 2 substantial replies to classmates or your faculty member that are at least 100 words in length. Be constructive and professional. Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to classmates or your faculty member.

Julie 1. Activity based costing is assigning overhead and indirect costs. These costs range from salaries, utilities, product, and services. Activity based costing is more detailed and complex than traditional costing systems. The main advantage is more accurate product costing, more effective cost controls. Having more accurate cost will show a better profit and loss for decision makers. It allows management to have a clear and accurate picture of the financials. Manufacturing companies use activity-based costing for reliable data. A manufacturing facility will benefit by doing an activity-based costing system, they have excessive amounts of product and labor to produce their item. In doing so they will have a detailed system showing true and accurate overhead and costs will benefit them in knowing the actual cost of the product.

Customer level - number of items. Such as customers, number of orders

Group Level what material is order, inspection of products

Service Level - Creating something new, innovative marketing, new product

Facility Level - Maintenance and repairs, maintenance of the building, over all maintaining the facility including security of the building.

Katrina 2.

Activity based costing is more specific than a traditional costing system. Traditional costing systems are usually general and have a rate of overhead that is applied a crossed the board to all products. Activity based costing actually looks at what each product is costing the company and documents it as such. This way each product or service is calculated at the correct cost and the company can adjust their prices as such, so that they can bring in enough revenue to cover each aspect of the business. Traditional costing applies just an overhead rate to each product. Activity based costing, instead of just an overhead rate, it is broken down to each activity that is costing the product. This can help the company monitor expenses. This is important when the company has specific cost reduction goals.

At the customer level, the number of customers and the number of orders should be accounted for.

At the group level, the material ordering and the inspection of products.

At the service level, marketing and appearance.

At the facility level, overall maintenance and utilities.