Calculate, compare and analyze with traditional costing and activity-based costing respectively.

? Traditional cost method: this method allocates indirect costs by cost center, and usually allocates costs by total production cost or total sales cost. This may cause different products or services to bear the same fixed cost.

? Activity-based costing: Activity-based costing is more detailed, and the cost is determined by allocating indirect costs to each independent activity or project. This method is usually more suitable for diversified products or services.

Step 2: Collect cost data.

? Collect all relevant direct and indirect cost data, including labor, materials, equipment, facilities, etc.

Step 3: Assign Indirect Costs

? For the traditional cost method, the indirect cost is allocated by production or sales cost, and the allocation ratio is usually adopted.

? For activity-based costing, indirect costs are allocated to each independent activity or project, usually using an appropriate allocation basis, such as labor time and equipment use time.

Step 4: Calculate the cost

? Use each method to calculate the cost of each product or project.

Step 5: Comparative analysis.

? Compare the cost data obtained from traditional costing and activity-based costing to see if they are different. This difference may be caused by different cost allocation methods.

? Analyze the reasons for the differences and find out which method is more suitable for your enterprise, especially when you need to know the cost of different products or projects more accurately.

The final choice of method should depend on your business needs and the complexity of the product/project. Traditional cost method may be more suitable for relatively simple business, while activity-based costing is usually more suitable for diversified and complex business.