Tell what you know about the difference between volume-based (traditional) costing and activity-based (ABC) costing

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Accounting

Tell what you know about the difference between volume-based(traditional) costing and activity-based (ABC) costing

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Costing is used in business accounting strategies as a way of determining the cost of manufacturing a product in relation to the revenue generated by that product Costing systems determine the overhead of production and then allocate those overhead costs to a business products There are two common methods for allocating these indirect costs to products Both of these methods assess overhead costs and then attach these costs to products based on certain cost drivers A cost driver is any component that costs money or any factor that is related to a cost occurring such as the volume produced or the number of labor hours The first of these methods is activitybased costing which See Answer

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