Activity-Based Costing Accounting – Research Paper Example
Activity-Based Costing Accounting Activity-based costing (ABC) offers numerous benefits rather than bad effects if properly implemented. The effectiveness and reliability of this concept depends on how a company or a business sector integrates its underlying accounting principles to their traditional costing system. However, the integration and harmonization of this cost system with an organization’s other system is quite a challenge and thus needing a correct approach.
The implementation and abandonment of ABC by Temp Employment Company (TEC) is cited as a paradox which can only be remedied through a system-wide integration of ABC information. This means that the idea behind this costing system is to be applied beyond the accounting office. Accordingly, it must be integrated dynamically to support the varying needs of decision makers.