The use of ABC therefore requires a change in the way overheads are classified by an organization. In a traditional costing system, overheads would be changed to products using at the most two absorption bases, usually labour hours and machine hours. ABC System, on the other hand, utilizes many cost drivers to absorb overheads into products. It is therefore claimed, and justly so, that the use of ABC products is a more realistic service or product cost, especially for service organizations and organizations with high overhead costs. However, managers used to the old system may resist the use of the ABC. Also, selecting the most appropriate cost driver from a host of the m may not be a straight forward activity. The relationship between the various activities that are involved in production may be time consuming and tedious exercise.
However, ABC is bound to produce the most accurate and the most relevant data fro an organization‟s planning, decision making, and performance evaluation and control purposes.