Sample Essay
The costing system in the company needs to be reflective of the industry practices and needs to provide a base for costing which reduces the outdated and provides a comprehensive solution to the increasing costs in the company. The costing needs to be revaluated in terms of its effectiveness and the achievement of the objects of the company. The following section discusses the different costing systems and recommends which one is more suited to the operations of Excel Limited.
The process costing system tends to collect the direct costs and disseminate the indirect costs through the manufacturing process. The costs are assigned to the different products of the company and then to the individual process units of the company. The costing is usually done in batch and manufacturing base products. The limitation of this costing system however is that the costing system is best suited to companies having a uniform production process, but Excel Limited has an option for customized production as well therefore this option is not suitable.
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