12.6 ABC is a costing system that was developed in the 1980s as a result of an increasing awareness in businesses of the deficiencies of traditional approaches to production overhead absorption.

Required:

i) Describe the principal deficiencies in the traditional product costing system which ABC seeks to correct.

ii) Describe the key features of ABC.

iii) Identify and comment upon a significant advantage and a significant disadvantage associated with the typical implementation of an ABC system.