Advantages and Diadvantages of ABC

Advantages:
  • more accurate cost per unit
  • better insight into what drives overhead costs
  • can be easily used in service costing as in product costing
  • recognizes that oh are not all related 2 production and sales volume.
Disadvantages:
  • impossible 2 allocate all oh cost 2 its specofic activities
  • choice of both activities and its drivers are inappropriate.
  • abc can be more complex 2 explain 2 the stakeholders.
  • benefits of abc might not justify cost.

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