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What does a well designed activity based costing system start with?
Wiki User
∙ 13y ago
An Activity Based costing always starts with defining your objective. why do you want to implement this system? This definition is very important. Then the scope of the project and then the phases.
The typical onjectives of the ABC system would fall under one the following three;
1) Understand Product, customer profitability
2) Understand the process costs and the cost drivers for them
3) Planning resource
Wiki User
∙ 13y ago
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A well-designed activity-based costing system starts with?
assigning manufacturing overhead costs for each activity cost pool to products
How does activity based costing differ from traditional based costing?
Activity based costing has primary difference of allocation of overheads which are based on activities performed by any department while in traditional costing system overheads are allocated on predetermined rate which may be not very accurate.
What are the differences between activity-based absorption costing system and traditional absorption costing system?
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
What is the main difference between activity based costing and attribute based costing?
activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
Activity-based costing is a means of more accurately accounting for direct labor cost?
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
Problem relating to the implementation of activity based costing and activity based management system?
Answering "Problem relating to the implementation of activity based costing and activity based management system
A well-designed activity-based costing system starts with?
assigning manufacturing overhead costs for each activity cost pool to products
How would you describe activity based costing?
Activity-based costing is a form of cost refinement, designed to obtain greater accuracy than traditional allocations in cost assignments for product costing and decision-making purposes.
How does activity based costing differ from traditional based costing?
Activity based costing has primary difference of allocation of overheads which are based on activities performed by any department while in traditional costing system overheads are allocated on predetermined rate which may be not very accurate.
What are the differences between activity-based absorption costing system and traditional absorption costing system?
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
What is the main difference between activity based costing and attribute based costing?
activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
Activity-based costing is a means of more accurately accounting for direct labor cost?
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
What is activity based costing system and traditional system and this affect on variance?
Ask your Mom she might know shes old
Company using absorption costing?
It is old costing technique & it is replaced by activity based costing
How do activity-based costing and the traditional cost system treat idle capacity costs differently?
Traditional costing system allocates the idle capacity cost to completed units while activity based costing only allocates the cost of capacity which is utilized while remaining capacity is expensed to income statement as period cost.
True or false direct labor-hours or direct labor cost should not be used as a measure of activity in an activity-based costing system?
False
What is the differences between activity-based costing and traditional product costs?
In traditional costing, overheads are allocated using blanket rate while in activity based costing overheads are allocated by the activities performed.
