Question: Describe how Activity Based Costing can benefit companies. You may wish to give an example of a company where activity based costing could be applied. Describe in detail how this company could benefit from Activity based costing.
The following items will be evaluated in particular:
1. Ability to identify the strengths and weaknesses of ABC
2. Ability to discuss the differences between traditional product costing and ABC
3. Explain why the inclusion of fixed costs in the product will lead to poor internal decision making