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Chapter+7+Discussion+Questions+-+SV - 8 How can ABC help a...

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Chapter 7 – Activity Based Costing - Discussion Questions 1. How does activity based costing differ from traditional costing systems? 2. What are the potential negative consequences of a traditional volume based  costing system? 3. What is meant by “product diversity”?  What is an overhead consumption ration? 4. Describe the two stages of activity based costing. 5. What is an activity dictionary?  What are some key questions that might help  identify activities? 6. How are resource costs assigned to activities?  Describe the difference between  direct tracing and driver tracing. 7. Activity-based customer costing can identify what it is costing to service different  customers. Why would this information be important to management?
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Unformatted text preview: 8. How can ABC help a firm identify its low cost suppliers? 9. What is driver analysis? What is activity analysis? What is performance analysis? 10. What are the two types of value added activities? 11. Give three examples of a non-value added activity? 12. Identify and define four methods of cost reduction. 13. What are the four types of quality costs that comprise quality cost management? 14. How do you calculate cycle time? Velocity? 15. Calculate activity rates and assign the total design cost of $1,200,000 to each product. Product A 4,000 design hours Product B 2,000 design hours Product C 14,000 design hours...
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