Accouting Ch 3

Unit- Level Activiites

Are preformed each time a unit is produced, for example providing power to run processing equipment.

Batch- Level Activities

Relate to specific products and typically must be carried out regardless of how many batches or units of the product are manufactured, for example maintaining inventories of parts for a product.

Activity- Based Management

involves focusing on activities to eliminate waste, decrease processing time, and reduce defects.

Activity cost pool

Is a cost bucket in which costs related to a particular activity measure are accumulated.

Facility- Level Activities

Are activities that are carried out regardless of which priducts are produced, such as insurance and property taxes.

Activity Measure

Expresses how much of the activity is carried out and it is used as the allocation base for applying overhead costs to products and services.

Bench-Marking

Is a systemativ approach to identifying the activities with the greatest room for improvement.

Activity- Based Costing

Is a technique that attempts to assign overhead costs more accurately to products than hte simpler methodds discussed thus far.

Activity

Is an activity- based ocsting is an eventis an event that causes the consumption of overhead resources.