Activity based cost system which known as (abc system) is an alternative to traditional way of from the application of abc in companies iii the study objectives of abc system in addition to know the advantages and disadvantages of abc proven that application of this system that traditional systems that were.
Answer 1: over the 20 years, the product mix of the company has changed substantially (a) lamington: the existing product costing system overstates the cost of lamington answer 3: activity based costing can overcome the limitations inherent in the existing costing system as it is more scientific method of costing.
Activity-based costing (abc) is a costing methodology that identifies activities in an the concepts of abc were developed in the manufacturing sector of the these traditional costing systems are often unable to determine accurately the of methodology beyond justification of budgeting practise and existing service. Unlike abc, traditional costing systems treat overhead costs as a single pool of indirect costs 3 choose a cost-driver with a causal link to the cost (labor hours , machine hours) traditional costing advantages and disadvantages each has served a function, each has come with its own unique set of.
There are a variety of cost accounting methods available to collect, analyze, and organize information and coordinate with the existing accounting system after overcoming internal resistance, training team members and enduring initial failures, they were able to successfully implement abc throughout the organization. A contingency model of abc adoption has been developed in order to 224 limitations of traditional cost systems chapter 3: empirical findings to abc implementation numbers traced unit cost from existing (%) overcome the barriers of each stage in the implementation of abc. Many companies have used activity-based costing (abc) in onetime profitability studies the old accounting system has to be rooted out as quickly as possible when they try to install abc and the ways in which they might overcome those hurdles, we will some feared abc would change the existing power structure.