What are some advantages and disadvantages of implementing and having a ABC costing system?

Advantages: 1. Provides realistic costs of manufacturing for specific products. 2. Allocates manufacturing overhead more accurately if many processes are involved. 3. Is better for optimising processes and the costs associated with them. Is good for Activity based management. 4. Determines product profit margins more precisely. Disadvantages: 1. Collection and preparation of data is time-consuming and expensive to operate and analyze. 2. Source data can be hard to come by. 3. The data from ABC systems can rarely be used for external reporting as it does not comply with accounting standards.