Activity-based costing: something old, something new.

Mid-Atlantic Journal of Business, December, 1994 by Schwan, Edward S.

The accounting concept of activity-based costing incorporates both traditional and innovative techniques. This idea involves the study of activities that go as far back as 30 years to study cost upswings and downswings. Costs easily go up but they rarely if ever go down. New techniques that have been incorporated into the concept include activity-based cost pools and variable step costing.

Recent accounting literature has argued that the shortcomings of traditional costing practices, e.g., the "distortion" of product costs (Cooper & Kaplan, 1988) and the "irrelevancy" of cost data to management needs (Howell & Soucy, 1988), can be overcome by adopting a new technique called "activity-based costing." However, like traditional marriage apparel, ABC is composed of...

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