ECONOMICS

Detailed explanation-1: -What is Traditional Costing? Traditional costing is the allocation of factory overhead to products based on the volume of production resources consumed. Under this method, overhead is usually applied based on either the amount of direct labor hours consumed or machine hours used.

Detailed explanation-2: -Cost accounting focuses on the expenses involved with running your business. It is a common form of accounting for manufacturing businesses, as it allows them to break out costs for each product they produce. Cost accounting, when it’s used appropriately, can help businesses identify areas where they can save money.

Detailed explanation-3: -Traditional allocation involves the allocation of factory overhead to products based on the volume of production resources consumed, such as the amount of direct labor hours consumed, direct labor cost, or machine hours used.

Detailed explanation-4: -The traditional method of cost accounting refers to the allocation of manufacturing overhead costs to the products manufactured. The traditional method is also referred to as the conventional method.