tailieunhanh - Lecture Cost management: Measuring, monitoring, and motivating performance (3rd edition) – Chapter 7
Chapter 7 - Activity-based costing and management. In this chapter students will be able to: Differentiate activity-based costing (ABC) from traditional costing, use cost hierarchy to help assign costs to activities, apply an ABC system in assigning costs, . | Lecture Cost management Measuring monitoring and motivating performance 3rd edition Chapter 7 COST MANAGEMENT Measuring Monitoring and Motivating Performance Third Canadian Edition ELDENBURG WOLCOTT CHEN COOK Chapter 7 Activity-Based Costing and Management Learning Objectives LO1 Differentiate activity-based costing ABC from traditional costing LO2 Use cost hierarchy to help assign costs to activities LO3 Apply an ABC system in assigning costs LO4 Describe the characteristics and use of activity- based management ABM LO5 Explain GPK and RCA LO6 Describe how ABC GKP and RCA affect managers incentives and decisions LO1 Differentiate activity-based costing ABC from traditional costing Activity-Based Costing ABC Activity-based costing ABC is a system that assigns overhead costs to the specific activities performed in a manufacturing or service delivery process. An activity is a type of task or function performed in an organization. The costs of the various activities become the building blocks used to compile total costs for products or other cost objects Traditional Costing vs. ABC Traditional costing systems Product A Direct Costs Indirect Product B Direct Costs Costs Product C Direct Costs Indirect costs are grouped into one or a small The individual Direct costs are number of cost pools a products are the traced to the cost allocation base final cost objects. individual assigns costs to the products. individual products Traditional Costing vs. ABC Activity-based costing systems Activity 1 Product A Direct Costs Indirect Activity 2 Product B Direct Costs Costs Product C Direct Costs Activity 3 Indirect costs are The individual products are assigned traced amp Activity costs are the final cost objects amp direct allocated to various pools allocated to products costs are traced to the of activity costs. individual products. LO2 Use cost hierarchy to help assign costs to activities What are Activities and How are They Identified The ABC cost hierarchy includes the .
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