Traditional Costing versus Activity Based Costing




Activity Based Costing
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Traditional Costing versus Activity Based Costing

When should I choose the traditional costing instead of ABC?
Compared with traditional costing, what are the drawbacks of ABC?
 

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1
Joseph Rivera
Manager, Philippines
 

ABC versus Traditional Accounting

Traditional accounting has a purpose to meet a specific need. I think that ABC was not developed to replace traditional accounting, but rather to serve another type of need, specifically the allocation of oh cost because some people think that ABC is a better way to do it.

 
1
Nicolas Forgues
Manager, France
 

ABC versus Traditional Accounting

Clearly ABC is a form of analytical accounting but not linked to the organization as traditional accounting used to do it. ABC looks in a different way in order to allocate all indirect costs (not only overhead) in regard to standard activity of a business (i am in it) and if using same reference as other companies (in France, the ABC model has been standardized in it through cigref association) allows more quick and easy benchmark enhancing the capability to compare its own performance. I found it very complementary and useful especially if an industry is pretty much standardized or normalized in terms of activity definition and implementation.

 
0
van Boxtel
Analyst, Netherlands
 

ABC versus Traditional Accounting

It depends on what your information need is. If you're interested in product or customer profitabili... Sign up

 
0
Joseph Rivera
Manager, Philippines
 

ABC versus Traditional Accounting

As the name suggests, it is the costing part in which ABC is sometimes better than traditional accou... Sign up

   

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