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ABC is Costing on the basis of activities involved and in General Costing it is based on Direct and Indirect expenses instead of cost of activities.
Basically, the traditional costing is used commonly by manufacturing companies to assign manufacturing overheads to the units they produce. Using this, only the products are assigned an overhead cost by the accountant.
On the other hand, the activity-based costing (ABC) is a more logical method of assigning manufacturing overhead costs to products. Unlike traditional costing that simply assigns costs based on the machine work hours, the ABC assigns costs first to the activities and processes that cause the overhead. Then, these costs are assigned only to the products that require the activities.
