Conventional Cost Allocation Systems versus Activity Based Cost Essay - 2

Conventional Cost Allocation Systems versus Activity Based Cost Systems - strain ExampleQuite a number prefer the ABC systems over the traditional approach allocation systems.One electric receptacle that has been pointed out when comparing the cost systems is the accuracy. Martin (59) argues that the ABC systems be more accurate than the conventional system. The information that is delivered through this system is more precise and can help the management in decision-making. This nub for effective use of this system there should a combination of the internal decision making with the external reporting system (Kaplan 58). The fact that there are no details that are assumed by the ABC system according to her proposition.In support of the conventional systems, the issue of efficiency and effectiveness arises. eyepatch the ABC system is efficient it provides so many details that are non necessary for the day-to-day running of the business (Cooper and Robert 1). These details accumu late to conduct a huge workload that is unnecessary. On the other hand, the conventional systems provide only the required details. The facts that stockholders, as well as creditors, have no beguile in knowing the product that generates more profit neither the customers. However, the ABC system can be advantageous over the conventional system because it does not assume any detail hence there are high chances of increasing profitability due to the well-kept inventory (Cugini and Oilonato 127).Another issue increase is the ability of ABC systems to increase the companys competitiveness. Some of the opponents of ABC systems have argued that ABC systems are not the only solution that faces the business world. The careen has been, there is the need for the systems to be complementary instead of having to compete (Martin 70). He proceeds on to argue that despite the accuracy in costs that comes with the system, the issue that should be addressed to increase the companys profitability is a change in processes.