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Give the advantages of using Activity Based Costing (ABC)

      

Give the advantages of using Activity Based Costing (ABC)

  

Answers


Martin
i. A more realistic product cost is provided especially where overheads of factory forms
significant proportion of total cost
ii. More overheads can be traced to individual products based on the activities being undertaken
iii. ABC recognizes that its activities which cause overheads and it is product which consume
those activities; hence the overheads
iv. It provides reliable information for decision making
v. It is flexible to trace costs to services, products, customers etc.
vi. overheads are caused by volumes of output in some are caused by complexity and diversity of
products.
marto answered the question on March 4, 2019 at 06:12


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