MANAGERIAL ACCOUNTING (1)

pLEASE DO NOT USE INVESTOPEDIA OR WIKIPEDIA.

Activity-based costing differs from traditional costing systems in a number of ways. In activity-based costing, nonmanufacturing as well as manufacturing costs may be assigned to products. And, some manufacturing costsincluding the costs of idle capacity--may be excluded from product costs. An activity-based costing system typically includes a number of activity cost pools, each of which has its unique measure of activity. These measures of activity often differ from the allocation bases used in traditional costing systems

Discuss how activity-based costing differ from traditional costing methods.

Do you believe that direct labor is a poor base for allocating overhead in many companies? Please explain.