Daffodil International University
Faculties and Departments => Accounting – The Language of Business => Business Administration => Business & Entrepreneurship => Cost Accounting => Topic started by: fahmidaemran on November 11, 2018, 12:46:02 PM
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Activity-Based Costing vs. Traditional Cost Accounting
The different approaches and outcomes from ABC and traditional costing are most accessible for illustration in the context of a product manufacturing example. However, the principles appearing here extend readily to a wide range of other business settings.
Example: Traditional Cost Accounting vs. ABC
For example, consider a firm that manufactures automobile parts through a sequence of machine operations on a metal stock. In such settings, traditional cost accounting views "product production costs" as either direct costs or indirect costs (or overhead).
Source: https://www.business-case-analysis.com/activity-based-costing.html