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10 Cards in this Set
- Front
- Back
Activity Based Costing
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a technique that attempts to assign overhead costs more accurately to products.
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Activity
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an event that causes the consumption of overhead resources.
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Each Activity has its own
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1.activity cost pool
2. activity measure 3. activity rate |
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Activity Cost Pool
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Cost bucket in which costs related to a particular activity measure are accumulated.
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Activity Measure
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Expresses how much of the activity is carried out and it is used as the allocation base for applying overhead costs.
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Activity Rate
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predetermined overhead rate in an activity based costing system.
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Unit-Level Activities
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are performed each time a unit is produced. Costs of unit level activities should be proportional to the number of units produced.
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Batch Level Activities
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consists of tasks that are performed each time a batch is processed. Costs depend on the number of batches processed rather than on the number of units.
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Product Level Activities
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relate to specific products and typically must be carried out regardless of how many batches or units of the product are made.
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Facility Level activities
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activities that are carried out regardless of which products are produced, how many batches, or how many units.
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