Management accounting question

[Gevin]

It is now fairly widely accepted that conventional cost accounting distorts managements view of business through unrepresentative overhead allocation and inappropriate product costing. This is because the traditional approach usually absorbs overhead costs across products and orders solely on the basis of the direct labour involved in their manufacture. And as direct labour as a proportion of total manufacturing cost continues to fall, this leads to more and more distortion and misrepresentation of the impact of particular products on total overhead costs.

You are required to discuss the above and to suggest what approaches are being adopted by management accountants to overcome such criticism.


Can anyone help me to answer this question, it is quite important for me.. thanks for your help )