Traditional and Activity-Based Costing Systems: Comparison and Contrast Between Them!

Well, traditional costs are better when the overhead of the company is quite low than the production costs of the company itself and this is why it can be easily defined as the addition of average overhead rates to the direct costs of manufacturing products. Whereas, all the overhead operations that are related to the manufacturing of each and every product is identified specifically by activity-based costing itself.

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The Traditional Costing System

 Anyways, the traditional costing system mainly focuses on estimating the single cost object. In short, on a single product or service whereas the activity-based costing systems mainly focuses on estimating the costs of many objects I.e., a number of batches, business processes, customers, suppliers as well as product lines!

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Types of Traditional Costing System

Along with this, in the traditional costing systems, there are two types, namely unit-based activities and facility-level activities whereas all levels of activity fall into the manufacturing cist hierarchy. For example, batch level, unit level, facility level as well as product level. Make sure that you mention all the above points in your assignment because they are the foundation points of the assignment for the topic. For more information or help, you can simply get activity-based accounting assignment help and get started!

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