Presence of a predisposing condition - Predisposing conditions include peptic ulcer disease, acute appendicitis, acute diverticulitis, and inflamed Meckel diverticulum. Indeed, acute appendicitis is still one of the common causes of bowel perforation in elderly patients and is associated with relatively poor outcomes.
(2) Two-Stage Allocation: It can be observed that both the costing systems follow a two stage allocation procedure. In traditional costing, in the first stage, overhead costs are allocated to production departments. But in ABC, in the first stage, overhead costs are assigned to each major activity and not to departments.
DEFINITION of 'Activity-Based Costing-ABC'. An accounting method that identifies the activities that a firm performs, and then assigns indirect costs to products.n activity based costing (ABC) system recognizes the relationship between costs, activities and products, and through this relationship assigns indirect costs to products less arbitrarily than traditional methods. Next Up.