... So, ABC is important to trace the support overheads and apportions it to suitable product cost to get more accurate rates according to it production activity. Abc classified overhead in a different way from traditional it apportion the overhead more correctly then traditional. ABC is includes to indentififying a major activities that take place in an organization it will ensure that cost linked to cost centres for each activity. ABC collects overheads into cost pools and traces these to products using cost drivers. ABC is purpose to provide a better understanding of the issue that involved in overhead costs and what causes overhead then how it related to a products. Cooper & Kaplan have claimed that ABC provides product cost information that is useful for decision making purpose. ABC systems can be used for product costing and profitability analysis. ABC can also be used for managing and controlling costs. (Cooper & ...

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