Traditional systems are capable of producing reasonably accurate costs where significant costs are incurred on different activities within a department but the same cost driver applies to all the activities in the department.

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Traditional systems, such as direct costing or absorption costing, can accurately allocate costs where there are significant costs incurred in different activities within a department, as long as the same cost driver applies to all the activities in the department. However, where different cost drivers apply to different activities, or where there are cross-functional activities that cannot be easily assaigned to specific departments, traditional costing methods may give inaccurate results.

Traditional Systems Are Capable of Producing Reasonably Accurate Costs Where