Chapter 7 Continued

Chapter 7 Continued - Chapter 7 Continued Please pick up...

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Chapter 7 Continued Please pick up hand out
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2 Activity-Based Customer Costing Customers are cost objects of fundamental interest. Customer management can produce significant gains in profit. Customers can consume customer-driven activities in different proportions. Assigning the costs of customer service to customers is much the same as assigning manufacturing costs to products.
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3 Supplier Costing Methodology Cost of a supplier is much more than the purchase price of the components or materials acquired. Assigning the cost to suppliers is similar to cost assignments we have seen for products and customers.
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Process Value Analysis (PVA) Analyze activities required to make our product or perform our service. Classify each activity as value-added or non-value- added    Identify ways to either  reduce or eliminate the non-value-adde activities.
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5 Value-Added Activities Activities necessary to remain in business Two types: Value-added by mandate Necessary to comply with legal mandate Discretionary activities
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6 Discretionary Value-Added Activities Three conditions must be met simultaneously for the activity to be classified as value- added: 1.Produces a change of state 2.Change of state was not achievable by preceding conditions 3.Enables other activities to be performed
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Chapter 7 Continued - Chapter 7 Continued Please pick up...

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