ACCO 330 - CHPT 5 - Chapter Five Activity-Based Costing(ABC...

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Blocher,Stout,Cokins,Chen, Cost Management 4e Activity-Based Costing (ABC) Chapter Five
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Blocher,Stout,Cokins,Chen, Cost Management 4e 2 A costing approach that assigns resource costs to cost objects based on activities performed for the cost objects Activity-Based Costing
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Blocher,Stout,Cokins,Chen, Cost Management 4e 3 An activity is a specific task or work done , such as production set-up A resource is an economic element consumed in performing activities, such as salaries and supplies A cost driver is the consumption activity that drives the cost of the resource , such as issuing a purchase order Activity-Based Costing Terminology
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Blocher,Stout,Cokins,Chen, Cost Management 4e 4 Activity-Based Costing Activity Analysis To identify resource costs for various activities, a firm classifies all activities according to the way in which the activities consume resources A unit-level activity is performed on each individual unit of product or service of the firm (e.g., direct materials)
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