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ABC costing is easier to apply in Manufacturing entities.
ABC costing is a system wherein indirect costs are allocated to products/ services.
In manufacturing entities, it is easier to know the number of Machine Hours used for each product, thereby the indirect costs can be allocated appropriately.
1 and2 as per requirement of organisation and emplyers
More easily fits to service companies.
Anyway, the use of the ABC method is most recommended in situations in which the indirect costs are higher or product range is wide.
In any case, how much smaller will be the products margins, more advantageous will be the implementation.
On services, offers the possibility to know the profitability of each service, thus enhancing its practical utility.
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