Some products are high volume and low cost if they can be produced by machines cheaply and easily from heap products and sold at a large profit margin. The opposite would be low volume high cost items.
Activity-based costing is a more accurate cost management system than TCA. One would use the ABC method when overhead is high, products are diverse, cost of errors high and competition is stiff. Traditional Cost Accounting is unable to calculate the 'true' cost of the product. TCA arbitrarily allocates overhead to the costs of objects. Total company's overhead is allocated to the products based on volume based measure e.g. labor hours, machine hours.
assigning manufacturing overhead costs for each activity cost pool to products
the answer is Variable Cost
A Curvilinear cost is a cost that changes with volume(activity) but not at a constant rate.
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.
Varable cost and fixed cost
Activity-based costing is a more accurate cost management system than TCA. One would use the ABC method when overhead is high, products are diverse, cost of errors high and competition is stiff. Traditional Cost Accounting is unable to calculate the 'true' cost of the product. TCA arbitrarily allocates overhead to the costs of objects. Total company's overhead is allocated to the products based on volume based measure e.g. labor hours, machine hours.
assigning manufacturing overhead costs for each activity cost pool to products
Activity-based costing tries to take the nonuniformity of resource consumption across products into account in the assignment of costs.
the answer is Variable Cost
cost volume profit is use anlyse how cost and profit change with change in volume of activity
A Curvilinear cost is a cost that changes with volume(activity) but not at a constant rate.
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.
ABC Costing: Under this method costs varies according to activity so if high volume of product is produced then direct labour also utilized accordingly and manufacturing cost will be increase or decrease according to the utilization of direct labour hours.
Organization-sustaining costs, customer-level costs, and the costs of idle capacity should not be assigned to products. These costs represent resources that are not consumed by the products.
Volume based drivers are cost drivers which relates to the things like no. of units made, direct labout cost and number of direct labour costs etc and is similar to the tpe of cost driver for unit-related activities
Activity-based systems can help managers in a global marketplace by providing accurate cost information for decision-making. By tracking costs at a detailed activity level, managers can better understand the cost drivers of their products/services across different markets. This enables them to identify areas for cost reduction or optimization, leading to improved competitiveness and profitability in the global market.