Question: Activity-Based Costing To begin in your initial post, define what is meant by an Activity-Based Costing (ABC) system as opposed to a plantwide overhead rate

Activity-Based Costing

To begin in your initial post, define what is meant by an Activity-Based Costing (ABC) system as opposed to a plantwide overhead rate used to apply overhead costs. List and explain at least two benefits and two drawbacks in implementing ABC. Focusing on the advantages, what benefits might implementation of an ABC system bring to a company? Is an ABC methodology applicable only in manufacturing businesses or can it be used by any type of enterprise? Explain.

Then, read the article, Rethinking Activity-Based Costing (Kaplan, 2005), and reflect on the proposed changes to ABC as a potentially more universally applicable costing method, summarizing your thoughts.

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