Scenerio: Accounting theory position is that every project has to have full cost reporting. A...

Question

Scenerio: Accounting theory position is that every project has to have full cost reporting. A business has to decide which type of project cost reporting it will use. Your management cannot decide which of two kinds to use. They will only consider job costing or activity-based costing.
WRITING: In a 4 paragraph essay take a position on which you feel would be the best method for project cost reporting when you are limited to selecting job costing or activity-based costing. Support your position with 1 cite of the text and 1 cite of a recent research article plus your experience and critical thinking.
(HINT: Do not waste time defining the two types as that won't leave enough sentences to go deeper into the element(s) of 1 vs the other which makes it your recommendation).
(MCCTE)

Robert · Accepted Answer

Comparing Activity Based Costing and Job Costing
Assuming the company is going for a project , where it needs to understand  the cost involved in  
individual activities, then the company may prefer to follow activity based costing(ABC).  
Reason being , an activity based based costing  treats individual activity as fundamental cost 
objects and assign costs to other activities  like products and activities (Tolleson, 2013). The 
other reasons for preferring activity based costing over job costing, because of the following 
reasons: 
(i) The cost of each activity is considered to calculate the product costs and the services 
rendered and so on. 
(ii) ABC considers many indirect cost pools, where every cost is measured and 
monitored.  
(iii) Greater accuracy of costs (Rose Johnson, 2013). 
Sl. 
No 
Activity Based Costing Job Costing 
1 A method of cost allocation to products 
and services. Considering to the extent of 
activity is used by product,

Scenerio: Accounting theory position is that every project has to have full cost reporting. A business has to decide which type of project cost reporting it will use. Your management cannot decide...

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