Activity Based Costing and Management Chapter Outline Show
Lecture Notes 1. LIMITATIONS OF FUNCTIONAL-BASED COST ACCOUNTING SYSTEMS
2. ACTIVITY-BASED PRODUCT COSTING
3. ACTIVITY-BASED CUSTOMER AND SUPPLIER COSTING
4. PROCESS-VALUE ANALYSIS
5. APPENDIX: QUALITY AND ENVIRONMENTAL COSTING
6. REPORTING QUALITY COST INFORMATION
7. ENVIRONMENTAL COST MANAGEMENT
What is the term for products having different consumption ratios for different overhead activities?Product diversity is present whenever products have different consumption ratios for different overhead activities.
Which costing system first assigns costs to activities and then to products?Activity based costing first assigns costs to the activities that are the real cause of the overhead. It then assigns the cost of those activities only to the products that are actually demanding the activities. Let's discuss activity based costing by looking at two products manufactured by the same company.
Which system focuses on the management of activities with the objective of improving?Activity-based management (ABM) is a systemwide, integrated approach that focuses management's attention on activities with the objective of improving customer value and the profit achieved by providing this value. Activity-based management encompasses both product costing and process value analysis.
What type of analysis is concerned with identifying the root causes of activity costs?Root cause analysis (RCA) is the process of discovering the root causes of problems in order to identify appropriate solutions.
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