The Proponents of Activity Based Costing Claim that This Approach to Costing Provides More Accurate Product Costings

Faces to the competitive business environment, many manufacturing and service organizations operate have already significantly changed in the past 30 years. These new changes have rendered traditional cost accounting methods lack of managers' demands for correct, detailed, correlative information for decision making such as strategic thinking, production promotion plan and cost control etc.. Also the new modern methods have effectively reduced the correlative importance of direct labor cost as production costing. …