Brief introduction of traditional cost method

As a kind of resource consumption, cost is the price paid by enterprises to obtain certain economic benefits, and finally it is compensated from the income of enterprises. In the case of a certain income, the lower the salary cost, the higher the economic benefit of the enterprise. Therefore, for a long time, the guiding ideology of traditional cost management has focused on "saving a screw, a rope and an envelope", and the rise and fall of cost is an important basis for evaluating performance. The so-called traditional cost management refers to various cost management systems before Rubin Cooper and Robert Kaplan founded ABC (Activity-Based Costing) in 1984. Activity-based costing has been widely praised for accurate cost information, improving business processes, and providing perfect information for resource decision-making, product pricing and portfolio decision-making.