Question

Difference between activity based costing and traditional costing

Answer 1

The first of these methods is activity-based costing, which is sometimes referred to as “ABC.” Activity-based costing determines all activities associated with production, assigns a cost to those activities and then determines the cost of the product.

The other method is traditional costing, which assigns costs to products based on an average overhead rate. This method pools all indirect costs in production and applies those costs equally across the board using one appropriate cost driver, such as machine hours.

Answer 2

Answer:

here is your answer:

• The first of these methods is Activity based costing ,which is sometimes referred to as "ABC". Activity based costing determined all activities associated with productions ,assigns a cause to those activities and then determine the cost of the product.
• The Other method is Traditional costing which assigns cost to Products based on an average overhead rate .This method pools all all indirect cost in product production applies those cost equally across the board using one appropriate cost driver, such as machine hours.