What are the advantages of activity-based costing compared with traditional costing?

Compared with the traditional cost method, activity-based costing is more scientific and advanced. Specifically, ABC has the following characteristics: ① ABC overcomes the distortion of cost information caused by traditional cost calculation methods and can provide relatively accurate cost information. ② Traditional cost management is mainly about products; Activity-based costing includes not only products, but also activities. It is possible for enterprises to improve activity chain, reduce operating costs and improve operating efficiency. ③ Activity-based costing is a broader absorption costing method. Activity-based costing involves many aspects of cost, so the cost information provided is more conducive to the pricing and other related decisions of enterprises. (4) All activity-based costs are variable, which is helpful for enterprises to analyze the causes of costs and thus reduce costs. ⑤ Activity-based costing is more meaningful to management, because it is equivalent to a "total cost management system" which combines cost feedforward control with feedback control and cost calculation with cost management.