Question
How do I compare and contrast a company's Traditional Costing results and Activity-Based Costing results. The total cost for item A for the company is
How do I compare and contrast a company's Traditional Costing results and Activity-Based Costing results. The total cost for item A for the company is $9,844,294 and $11,339,206 for item B, both were calculated via ABC, the total cost that came with the traditional costing system resulted in item A's total cost being $10,106,000 while item B's total cost is $11,007,500. How do I explain the results from the ABC system with an emphasis on the analysis of the activity costs? Also how do I know the differences between ABC and the original Traditional approach?
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