c. The reason the cost of OS-367 increased under the ABC system while the cost of GS-157 decreased is due to the total allocated cost for each product was different from the allocated cost under the Traditional costing system. Traditional allocation methods divide cost by departments and distribute the costs between the departments as they relate to volume-based cost drivers (Edmonds, Tsay, & Olds, 2011). However, ABC allocation methods differs by dividing the cost by activity centers and distributing the costs between the activity centers as they relate to a number of volume- and activity based cost drivers. The overhead costs in the ABC method are allocated based on how the products gain from the different activity centers. The ABC method
