activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
difference between conventional costing methodology ang activity costing
difference between cost and costing
In Activity based costing all overheads are charged to function or department based on activities they perform while in absorption based accounting, overheads are apportioned using some kind of base rate like labor hours or machine hours etc.
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.
Under absorption costing overheads are allocated to production based on predetermined overhead rates like machine hours, or direct labor hours etc while in direct costing overheads are allocated based on activity performed and relationship with production units.
difference between conventional costing methodology ang activity costing
difference between cost and costing
In Activity based costing all overheads are charged to function or department based on activities they perform while in absorption based accounting, overheads are apportioned using some kind of base rate like labor hours or machine hours etc.
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.
there is have some differeance . 1.
In traditional costing, overheads are allocated using blanket rate while in activity based costing overheads are allocated by the activities performed.
Under absorption costing overheads are allocated to production based on predetermined overhead rates like machine hours, or direct labor hours etc while in direct costing overheads are allocated based on activity performed and relationship with production units.
Target costing is when you have a goal for the project and its costs. Absorption costing is when you need to fix the excess spending.
actual costing uses actual indirect-cost rates normal costing uses budgeted indirect-cost rates
job costing refers to very small work while contract costing refers to large work like building a bridge.
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.
In Target costing system, comapnies tries to achieve target prices by reducing those parts of activity which are not increasing the value of product. Life cycle costing is a concept in which companies tries to read the overall process of development of product life cycle and tries to minimise the cost at area where it is not required or not increase the value of product.