This paper reviews the results of two Italian surveys of cost systems in the Italian’s manufacturing
companies. These provide an opportunity to assess the changes that have occurred in the
traditional and new product costing methods adoption status of firms over a recent 9-year period.
For the new product costing methods users, such as ABC, some comparative information
is provided on the nature of the new product costing methods and the levels of success. The present
survey confirms some reservations that have been expressed concerning the use of Activity-
Based Costing (ABC). However, instead of using only the adoption of ABC as measure of product
cost system design, this research use one proxy measure of cost systems sophistication to
capture the characteristics of the product costing systems. Results indicate that ABC, as higher
levels of cost systems sophistication, are positively associated with size of organization, namely
with large companies, as a contingent variable of firm characteristics.
Key Words: Traditional product costing, New product costing, Activity-based-Costing, Cost systems
sophistication, Contingent factors.
