Sparklin Automotive Costing

3 to 4 references and APA format.

SAC currently uses a basic standard cost system. Management knows very little about other concepts of costing and the benefits of having multiple costing methods. Your superior has asked that you and your team put together a presentation to management explaining various costing concepts as it relates to SAC (explain the usage and benefits of each).

Write a response to include the following:

the definition of the concept
how and when the concept could be used by SAC
how the application of the concept differs from the other concepts
its advantages and disadvantages

Costing Concepts:
full costing/absorption costing
variable costing
target costing
life-cycle costing
activity-based costing


The Sparklin Automotive Company (SAC) has been in business since 1930. It began business in the United States supplying spark plugs to automotive manufacturers (OEM, the original equipment market) and the automotive aftermarket.

SAC has introduced a new spark plug manufacturing process in the United States that produces a higher quality spark plug guaranteed to last 100,000 miles. The introduction of this spark plug has been very successful in the United States.

In addition to these types of projects, your responsibilities include creating and analyzing the monthly performance of each plant and consolidating the results into a set of financial statements footnoted with explanations.