Activity Based Costing (ABC) is said to be more accurate than the traditional costing methods because the Activity-Based Costing (ABS) method identifies the activities in the company and assigns their costs to production based on actual consumption. However, ABC has its own problems as well.

RESOURCES

ACTIVITIES

COST OBJECTS

Based on the model above and your knowledge on ABC, research on:

At least 4 benefits of ABC to an organization. (4 marks)

List and explain at-least 3 limitations of the ABC model. (3 marks)

List and explain at-least 3 problems associated with ABC model. (3 marks)