CIMA P2 Syllabus A. Managing The Costs Of Creating Value - ABC Benefits and Drawbacks - Notes ^{4 / 11}

ABC Criticisms

ABC is especially suitable for use in services where overheads are high and diverse however.

1. The cost of obtaining and interpreting the new information may be high

2. Some arbitrary cost apportionment may still be used

3. It's very difficult for a single cost driver to fully explain cost behaviour