Option #1: Activity-Based Costing
Automotive manufacturing companies such as Ford and GM have successfully implemented ABC over the past few decades, and achieved profitability in a competitive environment even though product offerings have become increasingly diversified. Drawing from the Module content, your text, and supplied articles, review the critical considerations in applying the activity-based costing method to a large automobile manufacturing company.
Answer the following questions:
- What are the most prominent signs that ABC methods might be appropriately applied to product costing for an automobile manufacturing company?
- Should managers be concerned about broad averaging of product costs?
- What are the steps required to implement ABC within the company?
- Name the four classifications of the ABC cost hierarchy and discuss an example of each type of cost classification for an auto manufacturer.
- Name a significant challenge in the implementation of ABC within the company. Rationalize your response.
- Name a significant opportunity in the implementation of ABC within the company. Rationalize your response.
In a 2- to 3-page, well-written paper demonstrating CSU-Global standards, answer the above questions.
In your analysis, include the following:
- An introduction
- Requirements 1 â€“ 6
Your paper should meet the following requirements:
- 3-4 pages in length (required number of pages does not include the title page and the reference page)
- Formatted according to CSU-Global standards
- Include at least 2-3 outside sources