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SIR IN ABC AND absorption costing syllabus there is abc vs absorption costing what will be write in the answer???
The syllabus actually asks you to be able to compare ABC with traditional absorption costing.
ABC is a form of absorption costing, but it is better than traditional absorption costing because each type of overhead is absorbed based on what causes/drives the overhead.
As a result it leads to more accurate costings and makes the company focus on what causes overheads, which leads to greater efficiency.
The problem with ABC is that it is time-consuming to identify the causes/drivers and for some overheads it might not be possible.
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