Driver In Activity Based Costing | Cost

In traditional costing methods, overhead costs are often allocated based on a single volume metric, such as labor hours or machine hours. This often leads to cost distortion, especially in companies with diverse products or services.

These support the entire organization. They are difficult to trace to specific products and are often treated as period costs in ABC. cost driver in activity based costing

There are two main types of cost drivers in ABC: In traditional costing methods, overhead costs are often