Written Assignment

Activity based costing (ABC) systems look at the underlying activities that drive costs within organizations and use these to assign costs. The use of ABC in organizations presents a unique way to reduce overall costs and better track the costs that arise within the overall process.

Consider these problems related to cost accounting and in a 1-2 page Word document, address the following points. Be sure to proofread your work prior to submitting to the drop box.

• Describe the three guidelines for costing system refinement.
• Explain what an activity based approach to designing a costing system would entail and contain.
• Describe the four levels of cost hierarchy. Why is it important to classify costs into each of the hierarchies?
• Explain the main costs and limits to implementing ABC systems.
• Why might management worry about over costing or under costing products? What would be the impact to the overall organization if this occurs?

Please make this 1-2 pages and in APA format.

Please include a reference page and site sources within the paper.