Is Activity Based Costing ( Abc ) Essay

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The first cost system of this part of this essay is activity-based costing (ABC). Cooper and Kaplan (1988) implemented ABC for taking care of issues of Traditional costing frameworks.
For allocating costs, Tradtional costing uses a single number like the machine hours or the direct labour hour, also cost allocations are volume-based. Comparing ABC with Traditional Costing Systems, ABC include all activities for a product, to making it easier to more accurately measure and allocate costs (Cooper, 1990; Cokins, Strat-ton, & Helbling, 1993).
It moves away from assigning costs to individual products but rather to activities or processes, which allows for assigning a larger part of overhead costs to specific cost units (Cooper & Kaplan, 1988; Friedman & Lyne, 1997).
Also important to know is that ABC define all the company activities as value adding or non-value adding activities (Cooper & Kaplan, 2005). Non-value added activities create waste, result in postponement, add expenses to the items, or for which cost clients are not willing to pay. ABC helps an association in discovering chances to streamline or lessen the expenses, or wipes out the whole movement, particularly if there is no esteem added viewpoint to it (Drury, 2012).
Many have the believe that ABC is better than Traditional Costing because ABC say more about the driven costs, and can split on any single activity and receives so more accurate cost details (Akyol, Tuncel, & Bayhan, 2007; Kee, 1995). As per this,
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