PPT_for_Chapter_5_without_in-class_assignment

PPT_for_Chapter_5_without_in-class_assignment - ACC 200...

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Unformatted text preview: ACC 200 Fall 2010 Chapter 5 Roby B. Sawyers, CPA, Ph.D. College of Management 2 Ch 5 - Primary Topics What is Activity Based Costing (ABC) and why is it necessary? Classifying costs as unit, batch, product or facility level Computing the cost of a product using ABC Compare and contrast traditional volume based costing with ABC 3 Why is it Necessary? Companies found that they really did not have a good handle on what their products really cost Intuitively, the calculated costs did not seem correct Companies found that competitors sold their products for less than they could What was going on? 4 What was going on? Overhead became a much more significant component of a products cost Companies made more diverse products that consumed resources very differently Variations in consumption of overhead could not be explained by simple variations in direct labor hours or machine hours As companies became more automated and used more sophisticated manufacturing processes, a more precise method of categorizing costs was needed 5...
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This note was uploaded on 01/11/2011 for the course ACC 200 taught by Professor Buckless during the Winter '08 term at N.C. State.

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PPT_for_Chapter_5_without_in-class_assignment - ACC 200...

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