Cost Review Test 1

Cost Review Test 1 - Chapter 4Activity Based Costing Steps...

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Steps o Activity Directory Activity Cost of Activity Activity Driver Quantity o Pool Rates Individual rates for each of the activities in the activity directory Cost of Activity ÷ Quantity o Product Directory o Overhead Rates Facility level cost Spit equally by the number of cost objects Traditional Method o Plant-wide or departmental predetermined overhead rates o Total Overhead / Driving o Applied Overhead = Overhead rate x Actual Driver Usage Plantwide vs. Department o Plantwide is whole o Department is sections o Only use when needed Definitions o Primary Activity Traceable An activity that is consumed by a final cost object such as a product or a customer o Secondary Activity Non-traceable One that is consumed by intermediate cost object such as primary activities, materials, or other secondary activities o Activity Drivers Drives the cost Measures the demands that cost objects place on activities o Cost Object Whatever you are assigning the cost to Aggregation o Unit level cost Variable cost, stop at certain amount, part of OH
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Cost Review Test 1 - Chapter 4Activity Based Costing Steps...

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