costs to specific processes and services. This system assures that the costs are accurately distributed to the products or services that generated them. ABC illustrates costs more

accurately, giving management insight to the cost associated with certain business activities. ABC extends the decision-making skills of management by expanding on traditional costing (job

order costing/process order costing) techniques. However, since ABC's introduction in the 1980's, many corporations are not using ABC, despite gained managerial decision making

capabilities. Even by the mid-1990s, ABC's use has not spread throughout the accounting industry and its use is not obvious (Selto & Jasinski, 1996). The following article will discuss the pros

and cons of the ABC method. Traditional Techniques ABC is an extension of traditional product costing techniques. These techniques are called job order costing and process order costing. A

job order costing system arranges costs for each unit as it goes through a production process. A process cost system col

the Nucor corporation used continuous casting machines to yield labor costs of $60/ton verses traditional steel's $130/ton. Labor cost today is infrequently the driving force behind costs it was

costs more easily, quickly and accurately for those products that have little or no product variation. Conclusion ABC is a valuable tool in calculating the costs of producing varying product lines.

Accounting, March 1996, pp. 42-48. Kelly, K. A Bean-Counter's Best Friend. Business Week, October 25, 1991, pp. 42-43. Ness, J.A. and T.G. Cucuzza. Tapping the Full Potential of ABC.

adoption rate of ABC. Another reason for not using ABC is the increased economies of scale. Many corporations are standardizing their products to reduce the costs to manufacture them. For

resources and allocate costs to those activities. For example, purchasing materials, record keeping, labor, materials, miles driven, machine hours and number of customers served are

increasingly less involved in the production process. For example, the textile industry replaced 100-year old shuttle looms for European air-jet looms, doubling output with less labor. In steel,

more errors. ABC can require more time to check and recheck to uncover errors. ABC generally requires more effort on the part of the accountant verses traditional methods and reduces the

Some topics in this essay:
Costing ABC, Model Ford, ABC ABC, Conclusion ABC, University Fall, Techniques ABC, Ness Cucuzza, Accounting March, Selto Jasinski, product lines, Week October, activity centers, cost driver, driver rate, cost drivers, activity based costing, traditional methods, management accounting, costs accurately, job costing, costing techniques, cost driver driver, accounting march 1996, march 1996 pp, varying product lines,