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.
It is easy to classify the basic difference between direct and indirect costs. Direct costs are immediately associated with the production of a product or service, while indirect costs include such things as rent â which may be associated with many products â or they may be several steps back in the production process.