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Assignment: What benefits and drawbacks are there for a business that uses a Standard/Traditional Costing model?
What benefits and drawback are there for a business that uses an Activity Based Costing (ABC) model?
If you owned a small manufacturing business with relatively high volume and multiple product lines, would you implement an ABC model? Why?
As you get ready to reflect on these questions, don't forget that the best answers are attempts to apply the concept to a small business and explore how a standard/traditional costing or activity-based costing system would/could be used. What are the benefits and the risks - or how could you adapt it to get the best of both?
Don't forget that, when you draw a blank on a question (or any part of it), take a quick look at the concept on the internet or online library. There will be some great inspiration there that will help you out AND lend some different perspective on the matter! (Don't forget to cite anything that you use!)
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