E6-23 (similar to) Aunt Betty Bakery reported net sales revenue of $ 59 comma 000 and cost of goods sold of $ 17 comma 000. Compute Aunt Betty's correct gross profit if the company made either of the following independent accounting errors. a. Ending merchandise inventory is overstated by $ 4 comma 000. b. Ending merchandise inventory is understated by $ 4 comma 000.

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?