Product Costing.

A: Activity-Based Costing (ABC) improves accuracy by tracing overhead costs to products based on the actual activities required to produce them. Unlike traditional costing, which often allocates overhead evenly or based on a single driver, ABC uses multiple cost drivers related to activities (like setup time, inspections). This results in more precise cost allocation, especially in complex production environments with diverse products. For a comprehensive explanation, check out [Harvard Business Review on ABC](https://hbr.org/2004/11/using-activity-based-costing-to-understand-product-costs).

A: Challenges include accurately collecting and allocating indirect costs, maintaining up-to-date cost data in dynamic production settings, choosing the appropriate costing methodology, and integrating costing systems with other enterprise systems. Resistance to change and lack of training can also impede successful implementation. Strong project management and stakeholder involvement are critical. For industry insights, refer to [Gartner's analysis on costing systems](https://www.gartner.com/en/documents/3902387).

A: Standard costing uses predetermined costs based on estimates for materials, labor, and overhead, providing a budget or benchmark for evaluating actual performance. Actual costing, on the other hand, records the real costs incurred during production. Standard costing helps in variance analysis by comparing actual costs to standards, identifying areas of inefficiency or cost control. More information can be found at the [Corporate Finance Institute's guide on standard costing](https://corporatefinanceinstitute.com/resources/knowledge/accounting/standard-costing/).

A: There are primarily three methods of product costing: 1) Job Order Costing, where costs are assigned to specific jobs or batches; 2) Process Costing, used in continuous production environments allocating costs to processes or departments; and 3) Activity-Based Costing (ABC), which assigns overhead costs based on activities driving those costs. Each method has specific use cases depending on the production type and business needs. For in-depth study, refer to the [CIMA guide on costing methods](https://www.cimaglobal.com/Documents/ImportedDocuments/cid_tcm3-5842.pdf).

A: Product costing directly influences pricing strategy because it defines the minimum cost threshold to cover expenses and achieve profitability. Understanding total product costs ensures that prices are set to not only cover costs but also align with market conditions and business objectives. It also allows companies to identify cost-saving opportunities to improve margins. For further reading, see the [MindTools article on pricing strategies](https://www.mindtools.com/pages/article/newSTR_99.htm).