Cost allocation and information technology

A number of recent surveys of management accounting practices have indicated that the traditional cost accounting system is incapable for accurate determination of product costs, which are critical to a number of management decisions. Activity based cost accounting system is thus developed to deal with the problem. However, the success of this system depends very much on the timeliness and accuracy of its cost-tracing process. Integrated with computer systems, automatic data collection devices are found to be very efficient and effective in collecting data for the cost-tracing process.