Anthony Burkhardt's Ch21-PowerPoint

Chapter 21 10 activity based costing abc appendix

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Unformatted text preview: ld re s p o n d id e ntic a lly to c h a ng e s in th e a c tivity o f th e c o s t d rive r, wh ic h m e a ns if th e a c tivity g o e s u p 1 0 % , th e n th e o ve rh e a d c o s ts s h o u ld a ls o g o up 1 0 % . Chapter 21-10 Activity-Based Costing (ABC) -- Appendix Activity-Based Costing (ABC) Appendix Ma y b e us e d with e ith e r a jo b o rd e r o r a p ro c e s s c o s ting s ys te m . Benefits: ( 1 ) Mo re a c c ura te & S ta b le p ro d u c t c o s tin g fo r b e tte r m a n a g e m e nt d e c is io n s , a n d (2 ) im p ro ve d c o s t d a ta re g a rd ing a n a c tivity m a y le a d to lo we r c o s ts fo r th a t a c tivity Limitations: ( 1 ) E xp e ns e o f o b ta in ing th e c o s t d a ta , & (2 ) ABC d o e s n o t lim it a rb itra ry a s s ig n m e n ts . ABC m a ke s m a n a g e rs re a lize th a t C o s t Da ta , no t p ro d u c ts , ultimately determine company profitability Chapter 21-11 Activity-Based Costing (ABC) -- Appendix Activity-Based Costing (ABC) Appendix ABC involves the following steps. • Identify the major activities that pertain to the manufacture of specific products. • Accumulate manufacturing overhead costs by activities. • Identify the cost driver(s) that accurately measure(s) each activity’s contribution to the finished product. • Assign manufacturing overhead costs for each activity to products, using the cost driver(s). Chapter 21-12...
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This document was uploaded on 03/23/2014.

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