COMPARATIVE STUDY ON THE DETERMINATION OF COSTS AND RESULTS UNDER THE TERMS OF USE OF ABC METHOD AND METHOD OF CALCULATION ON ORDERS

Abstract

Between the method on orders, as a method of traditional calculation and the ABC method there are a few similarities, but also distinctions. Both methods include in the cost of the product direct costs, while indirect costs are repaired by using a two-step allocation system. Thus, in the traditional system indirect expenditures are distributed on products using no more than two absorption bases (hours-work and/or machine hours), while ABC systems use multiple partition bases (number of operations, number of orders, etc.). As a result, ABC's repartition bases will impose more real production costs, especially where indirect expenditure holds a higher share.

Keywords

• ABC method
• method of calculating on orders
• production cost
• results