Discuss the Major Differences Between Traditional Management Accounting and Activity-Based

question 85

Essay

Discuss the major differences between traditional management accounting and activity-based costing.

---

Definitions:

Gallons Produced

The quantity of liquid produced, measured in gallons.

Revenues

The total income generated from normal business operations and other activities.

Direct Labor Hours

The total hours worked directly on producing a product or delivering a service, often used as a basis for allocating manufacturing overhead to products or services.

Engineering Changes

Modifications to the design, materials, or specifications of a product or system, often made to improve performance, reduce costs, or correct defects.