Page 7 - F5 Slides 2017-18
P. 7
Advantages of ABC
• More realistic costs.
• Better insight into cost drivers, resulting in better cost control.
• Particularly useful where overhead costs are a significant
proportion of total costs.
• ABC recognises that overhead costs are not all related to
production and sales volume.
• ABC can be applied to all overhead costs, not just production
overheads.
• ABC can be used just as easily in service costing as in product
costing.
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