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Topic: Business
Number of pages / Number of words: 5 / 1390
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TBU management computes a combined labor and overhead cost per labor hour and charges each job based on the number of labor hours used. This labor- based charge is then added to the materials cost to calculate the total job costs. This method does not provide an accurate cost per unit and can lead to over-costing or under-costing per unit...


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There-fore all of the company’s internal customers can be influenced by the use of the ABC systems. Managers over the company’s major products as well as other business units within the company can be influenced by ABC systems.

CONTRASTING ACTIVITY AND FUNCTIONAL-BASED COSTING SYSTEMS

Activity-Based costing (ABC) addresses internal operating concerns by capturing the current cost of performing an activity...


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