Paraphrase and add detailed explanations Activity-Based Costing (ABC): ABC allocates costs based on actual activities that drive costs, leading to more precise product costing. This method allows companies to see which products profit or loss based on shared resources and production activities. Example: A software firm might use ABC to determine that customer support services consume more resources than anticipated for certain software products. Consequently, the company can adjust prices for these specific products based on the true costs incurred, leading to better alignment between cost and price. Job Order Costing: This method is used by companies that produce unique or custom products. Costs are accumulated for each specific job and include direct materials, direct labor, and manufacturing overhead. Selling prices are calculated by adding a markup to the total job costs. Example: A custom furniture manufacturer applies job order costing to each client's order. If the total cost of producing a unique sofa amounts to $800, and the company adds a 40% markup, the selling price would be $1,120. This cost and pricing structure allows the company to assess profitability accurately for specific jobs