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Unformatted text preview: and services by means of cost drivers. Traditional based cost systems use a single overhead pool, which is a simple accumulation of costs that are not identifiable as product part costs or labor. b) The assumptions that must be met for ABC costing to be useful are. Product lines differ in volume and manufacturing complexity. Product lines are numerous, diverse, and they require differing degrees of support services. Manufacturing process or the number of products has changed significantly. Overhead costs constitute a significant portion of total costs. Production or marketing managers are ignoring data provided by the existing system and are instead using bootleg costing data or other alternative data when pricing or making other product decisions....
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- Spring '08
- Managerial Accounting