Traditional costing systems are more suited to organisations which produce a variety of products and costs are a relatively small percentage of total costs. This differs from organisations in which indirect costs form a proportion of total costs, increased exists and there are more diverse outputs and processes such that an ABC costing systems is more suited Hierarchy of activities are -level activities where activities performed on each individual unit of a product or service; -level activities: activities related to a group of units of products or services rather than to each individual unit of product or service; output- activities: activities undertaken to support categories of outputs (products and services), irrespective of the number of units or batches in which the units are produced activities: activities that support the organisation as a whole but do not have a cause-and-effect it is important to classity costs into a cost because costs in different pools relate to different cost-allocation bases and not all cost-allocation bases are unit level Traditional costing systems are more suited to organisations which produce a variety of products and costs are a relatively small percentage of total costs. This differs from organisations in which indirect costs form a proportion of total costs, increased exists and there are more diverse outputs and processes such that an ABC costing systems is more suited Hierarchy of activities are -level activities where activities performed on each individual unit of a product or service; -level activities: activities related to a group of units of products or services rather than to each individual unit of product or service; output- activities: activities undertaken to support categories of outputs (products and services), irrespective of the number of units or batches in which the units are produced activities: activities that support the organisation as a whole but do not have a cause-and-effect it is important to classity costs into a cost because costs in different pools relate to different cost-allocation bases and not all cost-allocation bases are unit level