Essay: Activity Based Costing

Sample Essay

The ideas presented in the article are quite relevant to the methodology of costing systems resented in the book. The book puts forth an idea that Activity Based Costing is quite useful and important in manufacturing companies and increases the process and manufacturing efficiency of companies.

The article on the other hand does not present this idea but provides a practical approach in verifying the successfulness of Activity Based Costing by testing its application in Australian firms. The book presents a basic concept of Activity Based Costing as a system and its rate of success is not thoroughly discussed. The authors of the book explain that Activity Based Costing increase the efficiency in organisations and is useful in identifying the various cost pools and cost drivers of the overall manufacturing process.

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