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COSTING METHODS PAPER
Super Bakery Inc.

ACC/561
March 28, 2012
Deborah Adkins

COSTING METHODS PAPER
Super Bakery Inc.

The costs of a company can be classified according to different criteria. Depending on the method we have Direct, indirect, Fixed and, Variable costs.
There are also costs that have a mixed nature: they can be semi-fix or semi-variable. And of course the costs that as already incurred on or are still pending which are
Potential and, incurred costs.

The same way there are different methods of costing that every industry fallow to establish the cost of their products depending on the nature of their products and the type of organization. Some of the most important or most used methods of costing are: job, contract, batch, process, service and operation costing there is also a method call Activity Based Method or ABC which one of the most important management innovations of the last hundred years and considered a new method for defining the costs of products and services.

Under this new methodology, the bases used in the determination of indirect costs and some administrative costs are units of measure determined by the most significant operational activities undertaken during the production process.

In the case of Super Bakery “a virtual, nationwide supplier of mineral, vitamin and protein enriched baked goods to the institutional food market” (John Wiley & Sons, 2009). The company needed to coordinate and regulate many functional activities in order to control the quality of the service provided to customers along with the costs of the services. The implementation of the ABC system certainly improved the processes of the company enabling the company to take off and grow 20% a year.

Super Bakery used four main strategies in order to install the ABC system and make it work for the benefit of the company. The first

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