Information systems A basic requirement for any cost allocation system is information availability. This is particularly so for ABC systems that rely heavily on activity information. In addition, ABC requires the monitoring of activities that have not involved monitoring previously. This raises issues of information capture and it is in new technology that answers to this are most likely to be found. b ABC can enable the exclusion of non-controllable costs, focusing only on those costs that are traceable to manager decisions, thereby providing a more fair outcome than absorption costing. ABC is often claimed to rest on a more accurate information base than absorption costing and hence, the impact of management decisions is potentially more easily seen under ABC than it is under traditional volume-related absorption methods. Also, ABC absorbs costs into products in a wider variety of ways than traditional absorption methods that rely mostly on labour and/or machine-hours. In extending the range of absorption bases, ABC is able to more closely track costs to the causes of the costs, which then links to management decisions.
