Chapter 7 Learn Smart

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activity cost pool

A "bucket" in which costs are accumulated that relate to a single activity measure in an activity-based costing system.

Batch-level activities

Activities that are performed each time a batch of goods is handled or processed, regardless of how many units are in the batch. The amount of resource consumed depends on the number of batches run rather than on the number of units in the batch.

Product-level activities

Activities that relate to specific products that must be carried out regardless of how many units are produced and sold or batches run.

In ABC each cost pool accumulates costs that relate to a single ________ measure in the ABC system

Activity

activity measure

An allocation base in an activity-based costing system

duration drivers

a measure of the amount of time required to perform an activity

transaction driver

a simple count of the number of times an activity occurs

Activity-based costing (ABC)

a technique to assign product costs based on links between activities that drive costs and the production of specific products

Organization-sustaining activities

activities that are carried out regardless of which customers are served, which products are produced, how many batches are run, or how many units are made

Customer-level activities

activities that are carried out to support customers, but that are not related to any specific product

Unit-level activities

activities that are performed each time a unit is produced

In ABC any event that causes consumption of OH resources is an

activity

a bucket in which costs are accumulated that relate to a single activity measure in ABC system

activity cost pool

what type of activity is preformed each time a group of units is prodcued regaurdless of how many units are in the group

batch level

Customoer orders are considered to be a

batch level activity

a cost pool including costs to entertain clients and make sales calls is a

customer level activity

the most common management reports using ABC data are

customer profitability product profitability

an activity cost pool accumulates costs for ______ activity measures

exactly one

in ABC _____ allocation is the process of assigning OH costs to activity cost pools

first stage

external reports are ____ detailed than internal reports

less

the most appropriate actvity measure fr a cost pool consisting of equipment depreciation an poweer to run machines is

machine hours

usually, traditional costing __ high-volume products and __ low-volume products

overcosts undercosts

abc treats org-sustain costs as

period expenses

as theh number of activities increase the cost to implement an ABC system also increase

true

what level of activity is preformed each time an item of a product is produced

unit level

in ABC the consumption of OH resources is caused by

an activity

Activity

an event that causes the consumption of overhead resources in an organization

activity based costing uses numerous

OH cost pools

carried out regaurdless of which customers are severed, products produced

Org- sustain

An activity base costing system

-May exclude some manufactoring costs from product costs -uses numerous OH cost pools

ABC does not conform to GAAP bc

-excludes some manufactoring costs -includes some manufactoring costs

the amount of time required to preform an activity is measured by a

duration driver

An ABC system usually ____ a traditional cost system

Supplements

in traditional costing ________ costs are assigned to products

Manufactoring

if some products are overcosted and some are under costed the errors will

offset eachother in a COGS and inventory valuations

administrating parts inventory is a _____ activity

product level

activity rates are used to apply OH costs to products and customers in the

second stage allocation

to reconcile ABC product margin to net income

subtrat OH costs not assigned to products


Ensembles d'études connexes

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PSYCH 101 - Psychology Chapter 1 & 2

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