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Unformatted text preview: costs are incurred on different activit ies wit h different costallo cation bases wit hin a department but different products use resources fro m the different activit y areas in the same proportions. 510 “Telltale” signs that indicate when ABC systems are likely to provide the most benefit s are as fo llows: 1. Significant amounts of indirect costs are allocated using only one or two cost pools. 2. All or most indirect costs are ident ified as outputunitlevel costs (i.e., few indirect costs are described as batchlevel, productsustaining, or facilit ysustaining costs). 3. Products make diverse demands on resources because o f differences in vo lume, process steps, batch size, or complexit y. 4. Products that a company is well suited to make and sell show small pro fits, whereas products that a company is less suited to produce and sell show large profits. 5. Operations staff has significant disagreements wit h the account ing staff about the costs of manufacturing and market ing products and services. 511 The main costs and limitat ions o f ABC are the measurements necessary to implement the systems. Even basic...
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This note was uploaded on 10/11/2010 for the course ACCT 321 taught by Professor Cole during the Spring '10 term at University of Miami.
- Spring '10
- Cost Accounting