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Your company has been using traditional costing and is considering moving to Activity Based Costings for...

  1. Your company has been using traditional costing and is considering moving to Activity Based Costings for a number of product lines. Explain what is meant by Activity Based Costings, how it differs from traditional costing, and how it may be advantageous.

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Expert Solution

1.Activity Based Costing is an accounting methodology that assigns costs to activities rather than products or services. This enables resources & overhead costs to be more accurately assigned to products & services that consume them.

CIMA defines "Activity Based Costing' as an approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs.

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ekkarill92 answered 1 year ago
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