Viewpoint: My sons and me and ABC costing

Activity‐based costing (ABC) has received considerable attention in recent years. In fact, some have portrayed it as a cure‐all for all kinds of problems. Presents a father‐son debate on this issue (the father as the consultant and the son as the entrepreneur). Argues that ABC may not apply in many situations, and that common costs remain common, no matter how meticulously we attribute them to certain cost drivers for allocation purposes. Furthermore, if considerable facility and capacity costs remain unidentifiable with individual cost objects, the problem of not knowing the true product cost remains unresolved. The non‐accountant son wins most of the arguments in this real debate. Laments our getting on someone’s bandwagon too quickly in confirming or rejecting a concept or an approach to doing things. Aims to shed some light on this interesting issue.