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ABC VS. TRADITIONAL Activity-based cost systems rationalize the allocation of overhead to products by identifying cost drivers. A cause driver is anything that has
ABC VS. TRADITIONAL Activity-based cost systems rationalize the allocation of overhead to products by identifying cost drivers. A cause driver is anything that has a cause and effect relationship on cause. Traditional costing systems often use financial variables such as volume of purchases, as the bases for allocating manufacturing overhead. ABC VS. TRADITIONAL The ABC system measures both the amount spent to acquire resources and the consumption of the Traditional cost systems only measure spending to acquire resources. resources.
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