db-phase 3 – process costing
1. Increased accuracy: Activity-based costing provides much more accurate product costs than traditional costing methods, which are based on arbitrary allocations of overhead expenses to products and services.
2. Resource visibility: By assigning costs to activities, ABC improves resource visibility and helps organizations identify wasteful processes or activities that can be streamlined for greater efficiency.
3. Improved decision making: With more detailed information about the cost structure of a company’s operations, managers can make better decisions about pricing, production volumes and product mix.
4. Better customer service: By understanding the hidden costs associated with providing a particular service or product, companies can adjust their pricing accordingly to improve their customer service offerings while still remaining profitable.
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