Companies usually, in pursuit of refining their costing system,adopt Activity-Based Costing systems with an...

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Accounting

Companies usually, in pursuit of refining their costing system,adopt Activity-Based Costing systems with an aim to arrive ataccurate cost figures. Describe, in your ownwords, the prominent factors/reasons (anyfour) that contribute to these companies’ taking suchinitiatives. That is, what are the main factors that are causingthese companies to consider refining their costing systems?

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Traditional overhead apportionment Traditional Costing system believes that departments are responsible for costing incurrence and hence cost driver for departments were identified eg a machine department uses machine hours as cost driver an assembly department which is labour dominated uses labour hours See Answer

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In: AccountingCompanies usually, in pursuit of refining their costing system,adopt Activity-Based Costing systems with an aim...Companies usually, in pursuit of refining their costing system,adopt Activity-Based Costing systems with an aim to arrive ataccurate cost figures. Describe, in your ownwords, the prominent factors/reasons (anyfour) that contribute to these companies’ taking suchinitiatives. That is, what are the main factors that are causingthese companies to consider refining their costing systems?