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Homework answers / question archive / What are the primary differences between traditional and activity-based costing? And when is an activity-based costing system better than a traditional allocation system? Discussion Board Instructions Summarized: The initial discussion board post will need to be a minimum of 100 words
What are the primary differences between traditional and activity-based costing? And when is an activity-based costing system better than a traditional allocation system?
The initial discussion board post will need to be a minimum of 100 words. The initial post is worth 12 points.
After you type your initial post, read through the other entries and reply directly to at least two classmates on a different day than your initial post. Each response is worth four points. The response posts need to be at least two-three complete sentences. When you reply, please type the name of the classmate you are responding to, provide a welcome message to that person, and type your name at the bottom of the message.
For all posts make sure to use proper grammar, capitalization, (I instead of i) and punctuation in this college level course in all correspondence. Please avoid “text” or “twitter speak” when corresponding.
The main difference between traditional and activity-based costing is that in traditional, you are just basing it on one activity and one cost driver. Like in the example in the lecture this week, one example was just based on direct hours. When it is activity-based in is based on multiple activities and drivers. Activity-based is better when the major part of the production is technology ( as stated in this week's lecture slides) Activity-based is much more detailed and thorough and really lets you get an overall better picture of costs since it uses multiple drivers and not just one like the traditional. The downfall is that it does take more time to do and so in turn is more expensive, so it is not right or practical for every company.
