1) In the early stage, costing system was viewed as a method of accounting that used various techniques to assign costs to particular cost objectives, e.g. the cost to perform an activity, produce a product or render a service. W.B. Lawrence stressed the importance of accountants becoming familiar with cost accounting in his 1930 text because even then, “the modern factory occupies more space and employs many more workers than did the factory of a generation ago”. In 1940, John Blocker recommended in his text additional uses for cost accounting in other industries, such as construction, mining, utilities and nonprofit organizations. He believed that all of these businesses needed to consider that the costing in different departments within a company could be controlled through cost accounting. Even in the 1960’s accountants and system designers developed cost accounting to do more than measure performance. Cost accounting was an integral part of planning and control in businesses.

After that, the concept of activity-based costing (ABC) was introduced in the US, initially in the manufacturing sector during 1970s and 1980s. Robert Cooper and Robert Kaplan brought the ABC concept to light and published the body of knowledge in the Harvard Business Review in 1988. Cooper and Kaplan defined ABC method as an approach to solve the problems of traditional cost management systems; that is, the conventional cost accounting systems are often unable to identify correctly the true costs of processes. Consequently, management and quality professionals are unable to make sound decisions or make decisions based on the misrepresented data. On the other hand, the ABC objectively assigns costs based on the cost-and-effect relationships. Then in year 1987, Robert Kaplan and W. Burns published in their book Accounting and Management: Field Study Perspective, the ABC body of