Activity-Based Costing: Advantages and Limitations

Managerial Accounting Assignment

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By student name
Professor
University
Date: 5th Sep 2018.
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Executive Summary
Here in the given report we are discussed on the topic of activity-based costing (ABC) and
analyzed the same. To review the use and importance of activity-based costing in the business
world and small and medium-sized organization we have been selected two research-based
journal articles. With the help of this report, it is also inferred what are the advantages of the
activity-based costing system and what is the limitation of this costing system and what are the
steps should be taken to resolve that limitation. The report also draws attention to the area where
this system plays a significant role in effective cost reduction and help in competitive pricing
decision especially in the manufacturing industry. From the in-depth study of the activity-based
costing system and after considering the advantage and limitation of this system it has been
concluded that how this concept of ABC can be useful in a business environment.
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Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Advantages of ABC costing technique.........................................................................................................4
Disadvantages of ABC costing technique.....................................................................................................5
Discussion on the two journals....................................................................................................................6
Explanation of the Selected Management Accounting Topic......................................................................6
Purpose of the studies and the research questions set out to be explored............................................6
Similarities and differences between the findings of the 2 studies.............................................................8
Specific outcomes and relevant learnings from the research findings..................................................10
References.................................................................................................................................................12
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