XXXXXXXXXXChoose ONE of the costing systems studied in this unit from the list below, and answer the questions that follow:• Job Costing• Process Costing• Operation Costing (Hybrid Costing) •...

T2 2020 - HI5017
Managerial Accounting
Student Name: Suraksha Wagle
Table of contents
Introduction……………………………………………………………….Pg 1
Analysis……………………………………………………………………Pg 2 to 5
Conclusion…………………………………………………………………Pg 5
References………………………………………………………………….Pg 5
Introduction
ABC Costing is implemented in only 20% of the companies in USA. While the rest 80% follows other costing system. The companies which followed ABC Costing were able to reduce their costs gradually and were found to be performing much more efficiently by mitigating the additional cost incurred previously than the companies which rejected or chosen other costing methodologies. Here we will discuss on the various benefits that UPS achieved after implementation of the ABC costing in their organization, how they were able to reduced the cost of transportation, how efficiently they were able to track the customer parcel without any delay and by incurring any additional costs and finally how they were able to improvise their parcel networking distribution system globally. Also, we will discuss the various lessons learned from this case study and provide a brief overview of the overall experience.
Analysis
ABC Costing in UPS System
There are various characteristics of ABC Costing. ABC costing is also branded as Activity Based Costing and is used to apportion the indirect costs to the diverse managerial products. ABC costing features is complex as per Robert Jinkens (2010) and is time consuming but sends exact results. This costing system provides a more accurate and distinct breakdown of the indirect costs. Installation and execution of ABC Costing in small and medium sized organization may be expensive and time consuming. For advanced companies it is easier to execute as they have the resources necessary to implement such cost controlling mechanism and the benefits would be achieved on a generously proportioned scale. ABC Costing is preferred and suggested by almost all CFO’s of the organization for its long term benefits. It is a prerequisite for setting up the re-engineering functions and augmentation of the business dispensation system. It is used by the business companies which are more dependent on system and system performance. It actually splits or segregates the various processes to execute an activity into several numbers of...