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Abstract
Activity-Based Costing (ABC) has been promoted and adopted as a basis for making strategic decisions and for improving profit performance. In addition, ABC information is now also widely used to assess continuous improvement and to monitor process performance. In contrast to ABC systems, traditional costing systems uses only unit-level cost drivers, can not capture the complex and multiproduct processes, designed for a narrow range of products. By focusing on specific activities, ABC systems overcome the limitations of traditional systems and provides more accurate product costs, makes better decision and improve the process. ABC systems will continue to supplement, develop and replace traditional costing systems. A case study is showed the difference of product profitability when using traditional costing system and ABC system.