Chapter 4 Study Plan

Study Plan: Activity Based Costing

Knowledge Targets

I can define the following terms as they relate to our unit:

Cost Driver Cost Pool

Product Margin Activity Based Costing

Customer Margin Activity Rate Plantwide rate

Departmental rate

Allocation Base Cost per Unit    

Reasoning Targets

  • I can explain the use of cost pools in activity based costing.
  • I can analyze the product margin of a product when using activity based costing and plantwide allocation.
  • I can understand the difference between plantwide rate, departmental rate, and activity based costing activity rate.
  • I can analyze the customer margin of a product using activity based costing.

Skill Targets

  • I can calculate activity rates for activity cost pools.
  • I can calculate the product margin using a traditional costing system and activity based costing.
  • I can allocate overhead using activity based costing activity rates.
  • I can allocate overhead using plantwide rates and departmental rates.
  • I can calculate the total cost of a department, job, product, or process using activity based costing.

Click ABC Costing study plan for a printable copy.

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