The Research on Management Accounting Tools—Based on the Comparison Between Activity-based Costing and Traditional Costing

Abstract

Activity-based costing (ABC) as an innovation of traditional costing method, overcomes the disadvantages of traditional costing method and meets the need of enterprise budget management. In this paper, we summarized research achievements at home and abroad, emphasized the advantages of ABC by comparing the ABC and traditional costing method. Furthermore, we gave a conclusion that ABC is a scientific management accounting tool, and it is bound to occupy an important position in the cost control of Chinese enterprises.