session4_part2_student (1-slide per pg)

Inaccurate overhead allocation can lead to

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: nsignificant. • Inaccurate overhead allocation can lead to questionable product cost information. better use labour hour as cost driver better use overhead or MH as cost dirver Traditional Method for Charging MOH • Traditional methods of costing tend to assign too little MOH to low volume complex products and assign too much MOH to high volume simpler products ABC 8 4 4 Activity-Based Costing Pl Plantwide allocation is simple but inaccurate, any solution? ! "#$%&'()*+,-.//%01%2332 When When ABC? 8 4 4 1. 1. 2. 2. 3. When Is an Activity-Based Costing System Needed? ABC should be implemented when . . . ABC stronger competition increases the cost of stronger competition increases the cost of competition errors caused by erroneous pricing. errors product diversity is high in volume, size, or complexity. comp the cost of measuring the activities and their costs is reduced, perhaps because of costs is reduced, perhaps because of reduced, erhaps computerized scheduling systems on the computerized p...
View Full Document

This document was uploaded on 03/13/2014 for the course RSM RSM222 at University of Toronto- Toronto.

Ask a homework question - tutors are online