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.
Filed Under: Accounting Tagged With: ABC, activity based costing, activity based costing system, cost of product, direct cost, draw back in traditional costing, indirect cost, selling price, traditional costing, traditional costing system, variable cost