Final answer:
Traditional methods of cost accounting are inappropriate in today's business environment due to their basis on outdated hierarchical organization, while modern methods such as activity-based costing provide a more accurate representation of costs.
Step-by-step explanation:
Traditional methods of cost accounting tend to be inappropriate in today's business environment because they are based on outdated methods of rigid hierarchical organization. In the modern business world, organizations are often more flexible and decentralized, and traditional cost accounting methods may not accurately capture the complexity of costs and activities. For example, traditional cost accounting may allocate overhead costs based on labor hours, which may not reflect the actual resource consumption of different departments or activities. Alternatively, modern approaches such as activity-based costing (ABC) or lean accounting focus on understanding the underlying causes of costs and better aligning them with the value created by different activities or processes within the organization. These alternative methods provide a more accurate and relevant representation of costs in today's dynamic business environment.