Review the Decision Case 1 (Harris Systems) located on page 942-943 in you textbook. Answer the four case questions in the Requirements section of the case. In addition, address the following in one to two paragraphs:
- Compare and contrast ABC costing and traditional costing methods, giving examples.
- In the assigned case, which system provides a more accurate picture of the cost incurred to produce the jobs?
- Provide examples of manufacturers in your geographic area and explain which system would be best for them.
Respond to each directive or question in 1–2 paragraphs. Apply current APA standards for writing style to your work.
Harris Systems specializes in servers for workgroup, e-commerce, and ERP applications. The company’s original job costing system has two direct cost categories: Direct materials and direct labor. Overhead is allocated to jobs at the single rate of $22 per direct labor hour.
A task force headed by Harris’s CFO recently designed an ABC system with four activities. The ABC system retains the current system’s two direct cost categories. Thus, it budgets only overhead costs for each activity.
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