Stock control Essay Example | Topics and Well Written Essays - 1750 words

Stock control - Essay ExampleMeasurement of cost by traditional cost method and ABC costing method are greatly different. ABC allocates the activity costs into products by cost drivers, while traditional costing method practice sessions quantity drivers to allocate costs. Since the use of the traditional costing method was not avoided of products loss, we may as well say then that its continual use would be a wrong sparing decision.It is impossible to get correct activity information of each activity and the activity channeled towards production by using traditional costing method, while this kindle be achieved easily and accurately by ABC method. With the use of ABC, Vauxhall could now analyze which activity is tends towards loss of products, in order to discuss the possibility of drop-off of such activities. The product loss, measured by traditional costing method, was not encountered by ABC method since ABC could accurately allocate cost information.