0
How does activity based costing differ from traditional based costing?
Wiki User
∙ 10y ago
Activity based costing has primary difference of allocation of overheads which are based on activities performed by any department while in traditional costing system overheads are allocated on predetermined rate which may be not very accurate.
Wiki User
∙ 10y ago
Add your answer:
Earn +20 pts
What is the differences between activity-based costing and traditional product costs?
In traditional costing, overheads are allocated using blanket rate while in activity based costing overheads are allocated by the activities performed.
Activity-based costing is a means of more accurately accounting for direct labor cost?
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
What are the differences between activity-based absorption costing system and traditional absorption costing system?
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
How do activity-based costing and the traditional cost system treat idle capacity costs differently?
Traditional costing system allocates the idle capacity cost to completed units while activity based costing only allocates the cost of capacity which is utilized while remaining capacity is expensed to income statement as period cost.
What is the main difference between activity based costing and attribute based costing?
activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
What is the differences between activity-based costing and traditional product costs?
In traditional costing, overheads are allocated using blanket rate while in activity based costing overheads are allocated by the activities performed.
Activity-based costing is a means of more accurately accounting for direct labor cost?
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
How would you describe activity based costing?
Activity-based costing is a form of cost refinement, designed to obtain greater accuracy than traditional allocations in cost assignments for product costing and decision-making purposes.
What are the differences between activity-based absorption costing system and traditional absorption costing system?
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
How is activity based costing better than traditional cost assignment systems?
Activity-based costing tries to take the nonuniformity of resource consumption across products into account in the assignment of costs.
How do activity-based costing and the traditional cost system treat idle capacity costs differently?
Traditional costing system allocates the idle capacity cost to completed units while activity based costing only allocates the cost of capacity which is utilized while remaining capacity is expensed to income statement as period cost.
Problem relating to the implementation of activity based costing and activity based management system?
Answering "Problem relating to the implementation of activity based costing and activity based management system
What is the main difference between activity based costing and attribute based costing?
activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
What is activity based costing system and traditional system and this affect on variance?
Ask your Mom she might know shes old
Company using absorption costing?
It is old costing technique & it is replaced by activity based costing
What activities does activity based management encompass?
ABM strategically incorporates activity analysis, activity-based costing (ABC), activity-based budgeting, life cycle and target costing, process value analysis, and value-chain analysis.
Does Toyota use Activity based costing?
yes
