How would you describe activity based costing? Also, can you explain why it might result in more accurate product costing information than the product cost derived under the traditional costing approach?© BrainMass Inc. brainmass.com October 2, 2020, 3:11 am ad1c9bdddf
Under traditional costing method , the costs are allocated as per the volume or machine hours. On the other hand Activity-based costing (ABC) is a more accurate method of allocating indirect costs to specific products as ABC focuses on the cost driver. Hence ABC is a more appropriate method than traditional costing method as ...
This solution discusses compares activity-based costing (ABC) to traditional costing and explains why ABC is superior.