Unformatted text preview: accurately attribute these costs in proportion to their production volumes. Traditional costing tends to under cost low volume products and over cost high volume products. 4) Are there times when it makes sense to use traditional costing systems? Yes, traditional costing can be useful when direct labor and materials are the predominant factors of production, when technology is stable, and when there is a limited range of products. 5) How do Activity-based costing systems differ from traditional systems? First, cost pools are defined as activities rather than plant or department cost centers. Second, the cost drivers used to assign activity costs to cost objects are activity drivers based on cause-effect relationships....
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This note was uploaded on 10/26/2010 for the course MBA FIN301 taught by Professor Park during the Spring '10 term at Liberty.
- Spring '10