Abstract

A profitable company is the one that is able to improve quality, cut down on costs and increase efficiency of operations, and eliminate different activities and products that incur losses. To achieve this, companies implement different costing systems. A costing system is a system that helps the management of a company with planning and decision making. This system plays an important role in providing accurate cost information about the products and services provided for clients. Many companies shift their focus from conventional or traditional costing systems to an increasingly popular costing methodology system that is activity based costing system. This article specifies characteristics of both traditional absorption costing and activity based costing and reasons for application of this methods among Cambodian companies.

Key words: quality, costs, costing systems, management, data.