FINC 577 Chapter 4 Notes Outline

Chapter 4 7 abc definitions activity activity any

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Definitions Activity: Activity: Any event, action, transaction, or work sequence that causes a cost to be incurred in producing a product or providing a service. Activity Cost Pool: The overhead cost attributed Pool: to a distinct type of activity. Examples: Purchasing Purchasing materials. Setting up machines. Cost Drivers: Any factors or activities that have vers: th a ___________________________________ ___________________________________ with the resources consumed. Chapter 4-8 ActivityActivity-Based Costing ABC ABC allocates overhead costs in two stages: Stage 1: Overhead costs are allocated to 1: activity cost pools. Stage 2: The overhead costs allocated to the 2: cost pools are assigned to products using cost drivers. The more complex a product’s manufacturing operation, the more activities and cost drivers likely to be present. Chapter 4-9 OVERHEAD COSTS Chapter 4-10 Overhead Overhead Costs Chapter 4-11 ActivityActivity-Based Costing ABC does not replace an existing job does order/process cost system. ABC does segregate o...
View Full Document

Ask a homework question - tutors are online